Episode Transcript
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SPEAKER_02 (00:00):
Welcome back to
another episode of CFO
Chronicles.
Get ready for an action-packedepisode filled with
game-changing insights andexpert knowledge as we dive into
the world of fractional CFOs andaccounting firm owners.
Our guest, Brett Frevert, is thefounder of CFO Systems, a team
of professionals dedicated tohelping clients navigate the
(00:20):
financial side of theirbusinesses.
With over a decade of experienceand a track record of success,
Brett is here to share hisvaluable insights on branding,
client acquisition, and scalingin the finance and accounting
world.
Brett, welcome to the show.
SPEAKER_01 (00:35):
Thanks, James.
Good to be here.
Appreciate your time andenthusiasm.
SPEAKER_02 (00:39):
Awesome.
I'm looking forward to it.
We've had this one on thecalendar for a bit, so we're
finally getting a chance torecord.
I would love to jump right in.
Can you tell us about yourjourney to becoming a fractional
CFO and founding CFO systems?
SPEAKER_01 (00:54):
Sure.
Interesting.
Um the the short version is mycareer followed the very
traditional CPA model of allright, CPA for in public
accounting for seven years,jumped across the desk, worked
for a corporate client throughan IPO, numerous acquisitions,
(01:17):
and then we sold that company.
I bounced around to a coupledifferent, a very large company
and then a very small company.
And in the summer of 04, I sawthis opportunity and saw this
need that there are a lot ofmiddle market and lower middle
market organizations that wouldreally benefit from a true CFO,
(01:39):
but don't need a full-time CFO.
And a full-time CFO wouldhesitate to go to these$30,$40,
$50 million organizationsbecause you're really only using
your CFO skills part-time.
And uh so I had the brainstormthat you know what I could work
for three of you guys at thesame time, and uh proposed it,
(02:01):
and it was universally justunanimous response was that's
absolutely stupid.
There's no such thing as apart-time CFO.
Do you want the job or not?
I said, Yeah, I don't want thejob.
And uh fast forward to fall, uhlate October of 2004, and uh the
(02:22):
small real estate firm I wasworking with came to the same
conclusion.
We don't need a full-time CFO.
And so we parted ways, talked toa couple of mentors and hung out
my shingle, said, you know what,there's a there's a thing here,
and uh coming from the realestate world, I called it
timeshare CFO.
Um, it's now evolved intofractional CFO, and it took off,
(02:46):
it just absolutely took offright away.
SPEAKER_02 (02:48):
Yeah, amazing.
What what's your take?
And it may be a little bitcontroversial, but what's your
take on I mean it sounds likeeveryone in their dog is a
fractional CFO now, or everyoneis doing advisory, and then when
you dig in not everyone isthere's there's a lot who do it
really well and they priceaccordingly and they they bring
(03:10):
the right value to the table.
And I think there's a lot whoare playing fractional CFO and
advisor.
How how do you I guess define ordifferentiate uh being a true
fractional CFO and and maybesome of those who are aspiring
to become a CFO but aren'taren't quite there yet, whether
it's the clients they're workingwith, what they're charging, or
(03:30):
what the deliverables look like.
SPEAKER_01 (03:32):
Wow, that's about a
three-day seminar, James.
Um so the the interesting thingis there's not a hard and fast
definition of CFO.
You know, by by definition, it'sthe chief financial officer.
So if you're a$20 millioncompany, whoever is head of
(03:52):
accounting is somewhat thechief.
Um, if you're at Union Pacificor Berkshire Hathaway, the chief
financial officer is much betterdefined.
So in our space, in this middlemarket, lower middle market
space, you you said well,everybody and their dog uh is is
(04:12):
is becoming a fractional.
And uh I think Deloitte did astudy.
They said that in the last yearor so there's an 80% increase in
the number of of uh LinkedInprofiles that now are
fractional.
I believe it.
So it it it truly is, and andyou're spot on.
Some people are extremelytalented and absolutely the
(04:36):
right, the right personality,the right skill set, um, right
for this space.
Others are, and this is where itgets a little bit delicate, but
you've you jumped right in.
Probably the best illustrationis there's a a very specific one
particular entity marketingthemselves to accountants, and
(05:00):
their tagline is bookkeeper toCFO in 90 days.
Just imagine that bookkeeper,CFO 90 days.
So the the challenge is the riskis that good people slogging
(05:20):
away in the in the corporateworld are saying, Boy, I'd like
to be a CFO, and these guys canteach me in 90 days, and it's
only you know several thousanddollars.
And they go and and go throughthe process, and then the the
the rest of the story is we getcalls from client or potential
(05:42):
clients from some uh a corporateleader, organizational leader,
and they'll say things like soare you guys real CFOs?
And these calls started comingin about a year ago already, and
I'll say, Yeah, absolutely,that's an interesting question.
Why do you ask it?
Yeah, and they said, Well, we'vegot a got a guy, and he says
he's a CFO, but he's really morelike a bookkeeper, and we need
(06:05):
somebody that's strategic, thatlooks forward, that understands
modeling.
Um, take a look at our website.
I mean, you'll you'll see theprofiles and the the resumes of
the people on our team, andyeah, we're actually very
legitimate, very experiencedCFOs.
We also have controllers, wealso have bookkeepers.
(06:26):
Um, but if you want a CFO, we'vegot CFOs.
SPEAKER_02 (06:30):
That's wild that
that's even a question coming up
from uh like the end users now,the the businesses asking, are
you a real one or are you, youknow, did you did you get the
certification in the last 60, 90days?
I I mean as soon as you saidthat, a light bulb went off of
thinking when you go to schoolto get a degree or get a
(06:51):
certification, it's not get likeyou don't go to university for
90 days to get a certification.
You have to put in the time, youhave to have the experience, you
have to get the knowledge, gowork for a bit and bring that in
to I think to truly get some ofthat experience and then
absolutely go out on your own.
And it sounds like that's whatyou were doing.
So the the aspiration of somewho just want to dive right into
(07:13):
be being a CFO without theproper experience, it seems like
there's a big piece that'sgetting missed.
SPEAKER_01 (07:19):
There is a big
piece, you know, and this is not
intended to be a sales pitch,but if you look at our our um
team, our average age is 51,which means our average career
is 27, 28 years.
So the the the the thedifference between the
(07:40):
difference being we've beenthrough we've been through
deals, we've been through IPOs,we've been through system
implementations, we've beenthrough a couple of serious down
cycles.
And um if if you want somebodyand we we compare ourselves to
the medical world on a regularbasis, you know, and and and the
(08:03):
difference between aneurosurgeon and a chiropractor
or a uh a heart surgeon and ageneral practitioner, both all
absolutely invaluable,absolutely, and and you wouldn't
want your neurosurgeon workingon your back, and you wouldn't
want your chiropractor in the ORfor your heart surgery, but but
(08:29):
there's this confusion cloudaround finance and accounting,
and and the phrase we hearfrequently is well, numbers are
numbers, you know, you guys areall numbers people, yeah.
But it's very different betweenbeing a bookkeeper, a senior
accountant, a controller, an FPAprofessional, and a CFO.
(08:51):
That's a great analogy.
And as a profession, you know,40 years in the profession,
we've done a horrible job ofdefining the differences.
SPEAKER_02 (09:03):
Yeah, that's
something I've I've noticed on
our side, marketing for otheraccounting firms and fractional
CFOs.
It's it's the education of againthe end user, the the individual
reaching out, the businessowner.
They, for the most part, not togroup everyone in the same spot,
but many just think, yeah, well,I just need accounting.
(09:24):
And it's anything that fallsunder that umbrella.
It could be your bookkeeping,could be help with a tax return,
or it could be help optimizingcash flow, but it's just
referred to as I need anaccountant.
Yep, yep.
So there's a lot of there's alot of education that goes into
it all.
Um, but Brett, tell me, so yourcompany works with uh a diverse
range of clients from startupsto multi-billion dollar
(09:46):
organizations.
Can you share with us aparticular um something
particularly challenging or atransformative experience you've
had while working with a client?
SPEAKER_01 (09:56):
Oh wow, those are
always the fun ones.
The case studies, James, um, yougot to be careful what you ask
for because I can tell you 20years of case studies.
Um, you know, everything we justhad a conversation last night.
One of my favorites was asmaller family-owned dairy that
we started out with a relativelysmall project.
(10:18):
Sometimes our projects read likeuh Disney movie script.
Okay.
The bankers coming in, theythey're gonna shut it down,
they're gonna foreclose.
We put a stop to it.
We helped them evaluate adifferent um product line.
Um, actually talked some of theshareholders into sticking with
it for another year.
(10:38):
Don't shut it down and write itoff yet.
And in three years, went fromlet's shut this down and write,
you know, went from the bankshutting us down to to heck with
it.
We put three million bucks intothis and not getting anything to
all right.
This unit paid a million dollarsin distributions, and then we
(11:00):
sold it for four million bucks.
So you look at the math and say,okay, you guys were ready to
one, the bank was going to shutyou down, or you were gonna take
a three million dollarwrite-off.
Instead, we got you five milliondollars to the good.
That's awesome.
Those are the fun ones, youknow.
That that's just absolutelyfantastic.
Um, another great one there's aindependent equipment leasing
(11:23):
company that was good owners,good people struggling with with
their financials andorganization and and how to
really capitalize a financecompany.
And uh in in about 15 months, wewent from chronically overdrawn
to um talking to several of thebig US and European banks to the
(11:50):
point that this is this issmaller town Nebraska, and we
had four$250 million term sheetson the CEO's desk.
I said, we just brought abillion dollars in the small
town Nebraska.
Wow, and you know, it's stufflike that that it that's so fun
(12:11):
and so rewarding because one,we're very competitive, right?
There's a lot of a lot of highschool and college athletes on
the team.
And so we're very competitive.
And two, you look at we look atthe number of jobs that that we
save and the number of jobs thatwe create, and then and the
economic activity of of havinghigh quality financial
(12:35):
information, financial systems,financial controls, and um those
like as I said, I could go onand on and on.
We got that's amazing.
SPEAKER_02 (12:46):
The the ripple
effect is so cool.
It did you ever think growing upwhen you were a child, this is
what you'd be doing in thefuture?
SPEAKER_01 (12:56):
Uh not even remotely
close.
Um, so I'm a fifth generationNebraska farm kid.
My dream from probably two yearson, two years old on was to be a
farmer to take over the familyfarm and and continue.
Um, I grew up in the so Igraduated high school in 81.
I don't know how well you knowum US history and the economy,
(13:20):
but in the mid-80s, call it 1983to 88 was one of the worst ag
crisis um in in world history,maybe worse than the Great
Depression, but definitely thatbad.
And I had a dear a banker, therewas a friend, became a dear
(13:41):
friend, that shut me down.
Said um he said, uh, how did hephrase?
He said, Um, you need to go useyour accounting degree.
I said, Yeah, I'm going to, youknow, I'm gonna be an
accountant, I'm gonna work uh anaccounting office tax practice
in the in the winters, and thenwe got the farm operation going,
(14:02):
we're gonna grow it.
Here's my plan.
He goes, No, no, no, uh, you'renot gonna farm next year.
And I said, Well, yeah, we gotyou know, we got the land lined
up, we got blah blah, we gotthis plan.
He goes, You don't understand.
I'm not gonna loan you anymoney.
Period.
And it was just you know, 24years of dreams, gone.
(14:25):
And now his promise was he said,now we're gonna get through
this, and you can come back,absolutely.
You can always come back, butyou need to go use your
accounting degree for a fewyears until we get through this.
And um, so when I see him aroundnow, still in my hometown, he's
retired, obviously.
Um, I'll say, you know, Galen,is it time for me to come back
(14:46):
yet?
That's awesome.
So, no, had no idea.
Um, you know, didn't even reallyknow or understand um there was
such a thing as an accountingprofession until I was in
college and um was takingaccounting classes and really
enjoyed it, and then startedseeing you know some of the
(15:06):
recruiting efforts going on, andpeople were work going to work
for places like the IRS and umsome of the big corps and then
the the CPA firms, and yeah, itwas it was a whole new world for
me.
SPEAKER_02 (15:20):
Yeah, that's crazy.
Well, I would say it's workedout.
I mean, CFO systems now it's oneof America's fastest growing
companies on the Inc.
5000.
Can you share with us what setsyour company apart um and has
contributed to its success?
SPEAKER_01 (15:36):
Yep, that's easy.
Everybody we talk to, whether asa as a potential client, a
potential uh colleague, we talkabout our four core values.
And you know, core values areone of those things that that a
lot of people talk about and andare um some are very, very good,
some are a bit of the poster onthe wall.
(15:59):
One of the greatest feedbacks Igot was from one of our
directors, very experienced guy,and he said his his phrase was
this is the only place I'veworked where not only can I
remember the core values, but weactually live by them.
So our core values are we onlyhave four.
Keep it simple.
Take care of your family first,get stuff done, work as a team,
(16:25):
be completely truthful andtransparent.
And that's what sets us, sets usapart.
Sounds a little bitself-aggrandizing, you know.
That's what that's what CFOsystems is built on.
If you embrace these four corevalues, um, you're gonna do
(16:48):
really, really well.
Um if and and we actually andand we've learned the hard way
that it's important not only forthe people on the team to
embrace the core values, butalso for our clients to at least
share the core values and fortheir trusted advisors, the
bankers, the lawyers, the CPAs,that they need to have similar
(17:10):
core values.
That's amazing.
That's great.
SPEAKER_02 (17:14):
Well, as a
fractional CFO, what are some
strategies or tips you have foraccounting firms and other
finance professionals looking toland high-paying clients?
That's always you know the oneof the hardest things, right?
Is how do I find the the$4,000,$5,000,$10,000 a month client
and and maybe larger, right?
What what are some of yourwhat's your recommendation?
SPEAKER_01 (17:36):
So I'll probably
back up a little bit.
Um, probably one of the mostimportant things in people in
the fractional world to to getused to is depending on the firm
structure, there's good, therecan be some seasonality and some
volatility in your month tomonth, um, definitely your
week-to-week, month to monthworkload and and compensation.
(17:57):
So we like people to recognizethat hey, there's going to be
some volatility.
I need to set uh some prettyserious targets for dollars and
hours and and treat this justlike a regular, like any other
business.
Have my own personal businessplan.
How do we go out and how do yougo out and get those clients?
(18:20):
Do things like talk to JamesDonovan and and have and answer
deep, hard-hitting questions.
Um, we believe strongly inbreakfast, coffee, lunch, and
happy hour.
And it it typically annoys myfriends in marketing and
advertising.
We don't spend a lot of money onmarketing and advertising.
(18:41):
Um, we support, we do a lot ofcommunity support, um,
nonprofits, especiallynonprofits, um, and we spend a
lot of time and effort gettingout and meeting people.
So, like this afternoon.
So last night we had um a happyhour with a small investment
banking firm.
Four of them, four of us, hourand a half of uh some whiskey
(19:05):
and wings, and we got to knoweach other really, really well.
Well, we've worked together alittle bit in the past, we'll
work together a lot.
We um this afternoon, I've I'mhaving um late afternoon coffee,
probably a drink, with uh aninvestment banker here in town.
He goes, Hey, we need to gettogether.
Um, you know, we got lawyerbuddies.
(19:27):
Um we belong to Rotary, webelong to um other networking
events.
If you look at my LinkedInprofile, I'm on four different
boards, they're all nonprofitboards, and I use my my
accounting experience to be tolead the accounting and or the
audit and finance committee orthe comp committee.
(19:51):
So that's how we find clients,and and I appreciate you
mentioning uh Inc.
5000, fastest growing.
We've been on it nine times.
So the you know, the channel,the risk is always well, wait a
minute, we've got some prettygood laurels, we can't really
rest on them.
Um, but nine times in 11 years,we're our our model works and
(20:16):
works pretty darn well.
SPEAKER_02 (20:17):
Yeah, wicked.
Uh shout out to Rotary.
I actually went to Sweden aftergraduating high school and did a
rotary exchange and and playedhockey there for a year.
So I've I've I hold a rotaryholds a close spot in my heart.
Um but what I'm hearing isreally just about relationships,
and that comes up a lot on theshow, is just being really good
(20:40):
at harvesting and nurturingthose relationships.
That's like the biggest thingthat that's coming from what I'm
hearing from you.
SPEAKER_01 (20:47):
Yep, absolutely.
We also have a concept we teachour people of four levels of
conversation, and and firstlevel is begging, second is
selling, third is marketing, andthe fourth is relationship
building.
So we say, I absolutely don'tbeg.
We don't say, Hey, do you haveany work for me?
Do you have any clients thatneed us?
Second, selling, we don't sell,you know.
(21:09):
There's there's uh again anotherentire industry of people that
will very cost effectively annoy10,000 people on your behalf and
send out emails and LinkedInmessages very inexpensively.
So we we make sure people do notbeg or sell, but marketing is
(21:30):
really, and I describe it asimagine you're writing a
research paper again, so inwhich you've just done.
Tell me about you.
How'd you get started?
Why'd you choose accounting?
What are some of the challengesyou run into?
You just go back to B school andand do a an abbreviated business
(21:52):
case or research paper, and it'sphenomenal.
And then yeah, start listeningand asking good questions, and
then level four relationshipbuilding.
So, for example, last night, thefour we had four investment
bankers in, ranging all the wayfrom 65 years old down to late
(22:14):
20s.
Late 20-year-old, um, justgraduated from uh University of
Nebraska.
He's a football player, talkedabout that.
He's engaged, he's gonna getmarried in February.
His fiance is actually a teacherat the school of one of the
other guys who's got three kidsalready, fourth one on his way,
(22:35):
and and and and the owner, theleader is second generation in
this firm.
And so, you know, in an hour anda half, we get to know each
other really, really well.
Um, and the difference betweenan hour and a half of level four
(22:55):
conversation, a little bit oflevel three, quite a bit of
level three, but some level fourgets that connection so much
tighter than you know what?
I read a book way, way, way backwhen, and the author said, all
things being equal, people wouldrather do business with a
friend.
(23:16):
Now, all things not being equal,people would rather do business
with a friend.
So that's our oversimplifiedapproach.
Go out and make friends.
SPEAKER_02 (23:27):
Appreciate you
sharing that.
Um, in your experience, what aresome common mistakes that
accounting firms and andfinancial professionals make
when it comes to branding andmarketing themselves?
SPEAKER_01 (23:40):
Um probably two key
ones that I've seen over and
over.
Um one is thinking that theirnewsletter is an opportunity to
be an abbreviated accountingtext.
So you know, I I subscribe to asmany as I can, and a lot of them
(24:02):
come out with a hey, here's thenew tax rules, and this is what
it means, blah, blah, blah,blah, blah.
Here's the new depreciation.
I look and I think that's why Ihire you.
I don't really want to be a taxexpert.
Can't be, don't want to be.
I just soon hire you.
You tell me you're a tax expert.
The other want thing is sotrying to teach people their
(24:26):
their trade, um, I think is justa horribly misguided effort.
The other thing that we seewould be somewhere along those
lines, saying, hey, we're thesmartest ones in town, you know,
and and um let me tell you howmuch better we are than the
others.
Like, you know, there's a lot ofreally good CPA firms, there's a
(24:48):
lot of really good CFO firms, alot of really good, uh a lot of
really good um uh podcastleaders.
Um probably you know, to to tohave the the arrogance to say
we're the best and the brightestor the smartest or the fastest
(25:08):
or anything like that, it's it'sself-delusion.
And the firms that say that umit just is common.
SPEAKER_02 (25:19):
Interesting.
How would you go about so ifyou're not trying to teach your
audience about what's going onand educating them that way, how
would what spin would you put onit for that newsletter?
SPEAKER_01 (25:33):
That's a really good
clarification.
I like to alert people to atopic or an issue, and and but
but not have the here's how to,you know, it's got it, okay.
More of the headline approach.
Um, back in the old days, WallStreet Journal created this
(25:54):
approach.
Front page, they'd have twolines and then rest of article
on page seven.
And so our newsletters havealways been like that that hey,
Bill Gates gave a commencementspeech at Stanford University
and talked about this hot linkto the rest of it.
Um, you know, now right now,obviously, a lot of the hot
(26:19):
things are um the Fed and theinterest rates and and and um
maybe even tariffs and maybesome of the tax laws.
But we'll just say here's a hottopic, and there's a hot link if
you want to read more.
Part of what so you know part ofpart of our culture, part of our
(26:43):
our DNA is we've many, many ofus have been CPAs, and we've all
been corporate controllers andCFOs.
So we've been on this side ofthe desk when consultants are
coming and pitching their waresand giving us the the 13-page
brochure and telling us how goodthey are and and telling us all
(27:05):
the things they could do if wejust pay them money.
So we know what it's like, andso we don't do that.
Perfect.
SPEAKER_02 (27:14):
No, I appreciate you
clarifying that it'll be really
helpful for everyone.
Um last question for you to tiea bow on it all.
What's the best piece of adviceyou've ever received?
SPEAKER_01 (27:29):
Best piece of advice
ever?
I was so fortunate, James.
I had so many good mentors.
Um probably the best piece ofadvice.
Um actually I'll I'll hone in onone.
Um, one of the one of the CPAs Iwork for at Deloitte said, you
have to figure out how they makemoney.
(27:51):
What is the real business andhow do they make money?
And and then the accounting andsystems and everything else, you
know, builds around that.
SPEAKER_02 (28:02):
Love that.
That's cool.
Really figuring out wherewhere's the what's the biggest
lever to pull on?
SPEAKER_01 (28:08):
Yep.
SPEAKER_02 (28:09):
Awesome.
Brett, thank you so much forcoming on, sharing all of your
your wisdom and knowledge, andum congrats on all the success.
Number year number 10 for theInc.
5000 coming up.
Um, where can people get intouch if they want to continue
the conversation?
They want to reach out.
Uh, what's the best way they canum they can continue the
(28:30):
conversation with you?
SPEAKER_01 (28:31):
Uh quickest and
easiest will be on LinkedIn,
Brett Frevert.
Fortunately, I've got a bit ofan unusual name.
So Brett Frevert or CFO systems,um, or then go to our website,
CFO systemslc.com.
Um our our landline, our depthuh office number is uh 40288.
(28:55):
I'm gonna embarrass myself.
I don't know.
I don't know.
SPEAKER_02 (28:58):
That's okay.
SPEAKER_01 (28:59):
Francis part of it,
James.
LinkedIn.
SPEAKER_02 (29:01):
LinkedIn's the best
spot.
It's the website.
Yeah, sounds great.
We'll put that stuff in the shownotes if you can get in touch.
Again, Brett, thank you so muchfor coming on.
I really appreciate it.
This was awesome.
Fantastic.
Good to meet you.
Thanks.
Thanks for tuning in to thisepisode of CFO Chronicles, the
secrets behind success.
I hope you found value intoday's conversation.
As we wrap up, I'd love for youto do two things.
(29:24):
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(29:45):
It's time to position yourselfas the advisor your clients
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And don't forget, you canconnect with me on LinkedIn to
stay up to date on what'shappening in the world of
accounting and financial growth.
We've got exciting topics comingup, so stay tuned for the next
episode of CFO Chronicles.
Till then, keep pushing forward.
Your growth is just onestrategic move away.
SPEAKER_00 (30:06):
Thanks for listening
to CFO Chronicles, the secrets
behind success.
We hope today's episode providedvaluable strategies to help you
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Be sure to subscribe, follow,and share with fellow
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Connect with us on LinkedIn andleave a review or comment to
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(30:26):
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Until next time, keep strivingfor success and unlocking your
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