Are your books ready for a fractional CFO? A cleanup checklist
A practical checklist for reconciliations, monthly reporting, inventory, and close responsibilities before CFO support begins.
You do not need perfect books before asking for CFO support. You do need a clear view of which information is dependable, which balances need work, and who will resolve the gaps.
A fractional CFO uses accounting information to help owners plan and make decisions. If the underlying records change unexpectedly, a forecast or margin review can create false confidence. Use this checklist to prepare a useful starting conversation with your accounting team.
1. Reconcile the balances that matter
Confirm that bank and credit-card accounts are reconciled through the latest closed month. Review outstanding items and unresolved differences. Agree debt balances to lender statements, and review payroll-related balances against supporting records.
A completed reconciliation should explain a balance, with supporting records and an accountable reviewer. Mark unresolved items clearly instead of assuming a historical balance is correct.
2. Review receivables, payables, and inventory
Look for old invoices, customer credits, disputed balances, duplicate supplier bills, and payments recorded against the wrong account. Compare detailed receivable and payable schedules with the general ledger.
For manufacturers, document how quantities, work in process, and inventory costs are maintained. Review count differences, obsolete stock, and the way production activity reaches the accounting records. Identify missing information before relying on reported margins.
3. Make the monthly close repeatable
Create a close checklist with an owner, reviewer, and due date for each task. Include billing and purchasing cutoff, payroll, accruals, inventory, reconciliations, and review of unusual entries as appropriate to the business.
Agree which reports are preliminary and when the period is ready for management review. Document significant corrections after closing so the team understands why previously reported results changed.
4. Build a report owners can use
Start with an income statement, balance sheet, and cash flow view. Compare results with the prior period and plan where the comparisons are meaningful. Explain large changes in plain language, including timing differences and one-time items.
Add only the operating measures needed for current decisions. For a manufacturer, those might include job or product margins, inventory aging, collections, or production variances. Define each measure and use the same definition each month.
5. Clarify responsibilities and access
List the accounting systems, operational sources, and people responsible for them. Agree who records transactions, who closes the books, who reviews results, and who updates the forecast. Use individual access appropriate to each role when work begins.
Share a summary of known issues during an introductory conversation. Exchange detailed financial records through an agreed secure method after discussing the engagement.
Use our monthly finance meeting agenda to turn reliable reporting into actions. Explore fractional CFO leadership and management reporting and analytics to discuss the support your team needs.
General business guidance. The right approach depends on your records, operations, and financial circumstances.