← Becker Business
Becker Business
The Evolving Role of the Fractional CFO with Michael Minnaugh of Sataurius Strategic Consulting 2-18-26
00:16:45
Loading summary
Transcript35 lines
- [00:00]
A
I've tried all sorts of ways to make a website with AI and honestly, it's not as easy as it looks. The results can be unpredictable and the moment I try to tweak something, everything breaks. Then I found Wix Harmony. It blends vibe coding with classic drag and drop. So you can generate pages, sections or even complex components in seconds, then fine tune every pixel without breaking your site. The best part, everything runs on enterprise grade infrastructure. Try it for free@wix.com Harmony.
- [00:30]
B
This is Scott Becker with the Becker Business and the Becker Private Equity Podcast. Thrilled today to be joined by a brilliant leader who started his own consulting firm several years back, works in the CFO and fractional CFO space and a lot more. We're thrilled today to be joined by Michael Minow. And Michael's going to talk to us about what he does, how he does it, trends he's watching, and a lot more. Michael, can you take a moment and introduce yourself and tell us about Satorius Strategic Consulting?
- [01:02]
A
Yes. Thanks, Scott. Yeah, I'm Michael Minnell. I started Satorius Strategic Consulting a few years ago. Basically what we do is outsourced accounting. We do MA advisory and transaction advisory. We also do ERP implementation help. When it comes to the ledger side. We also started our tax practice a few months ago.
- [01:24]
B
Congratulations. And I know you're a Penn State Nittany lion and so forth. Great, great background, particularly in accounting and finance. And you've also spent years in sort of leadership in health systems in corporate America. Talk about as companies start to grow, where does it make sense to use a fractional CFO versus a full time CEO? How do you look at those things? External control versus internal? How do you think about some of those things?
- [01:50]
A
Yeah, I think it comes down to size and complexity a lot of times, you know, when it comes to the fractional CFO space, that's really what we look for. As soon as you get to, I'd say a revenue range of about $30 million, you're probably going to consider to hire somebody full time in most cases. When we come in on the fractional side, there's usually at least some accounting already set up, whether it's a controller and maybe a few, you know, AP or AR clerks and a bookkeeper or maybe there's just a bookkeeper. When we come in, there's usually something already there and we are just kind of optimizing it, correcting some things that are inconsistent, establishing best practices, that kind of thing.
- [02:34]
B
And talk about the difference between sort of good accounting practices and also Providing financial leadership to a client. Talk about the differences in those. One seems table stakes. One seems taking it another value add. Talk about what your clients look for with you.
- [02:49]
A
Yeah, so good accounting is basically just having good internal controls. Your books are clean, you have a close process, you have a reporting process. Those are, as you said, table stakes. Those are just things that you need to do. As far as the financial leadership, where we enhance the financial operation is really coming in as a thought partner for companies who are going through periods of growth. Maybe they don't know how to, you know, get a line of credit. Maybe they've never been through a sale or maybe they want to go through an acquisition. We come in when you know, they're doing something that is either incorrect or wrong or they're going through sort of a growth phase or a large change and they need a real expert and thought partner to come in and, and help work through it with them.
- [03:43]
B
And talk about the core type of clients that you work with. Is it industry specific or not or where do you end up doing your best work, best clients, etc.
- [03:55]
A
Well, we are currently not industry specific, I would say, however, we do have a lot of clients in the healthcare space. Just because of my background. My background is largely in healthcare, health, tech, so I tend to just get a lot of business that way. But we have other industries as well. We have construction companies, we have professional services agencies like law firms, marketing agencies. We also have other non profits we work with. So really runs the gamut. But really what we try to do is we try to meet the client where they are and just give them the best experience possible. Because a lot of times you run into founders who are, I'll say, somewhat financially savvy, but they tend to focus on either sales or cash. It's one or the other. And they just don't have maybe the knowledge, the bandwidth to focus on the other parts of the business.
- [04:50]
B
And take a second. I know nationally there's increasingly a shortage of accountants. How does that play into the outsourced CFO business and what you folks do.
- [05:00]
A
It does, it plays really well. We do have interim contracts as well for, you know, maybe they're, they lost a staff accountant and they, and they need someone during, you know, year end to really, you know, bolster the roster that they have. From an accounting perspective, I think from a shortage of accountants, fractional CFOs and outsourced accounting are going to be very much needed. But I'm starting to see trends in artificial intelligence that are really picking up Especially with some of the new models that have been released recently. So I think those are going to play a big part in the future of accounting.
- [05:40]
B
And how important is it that you as an outsourced CFO firm, fractional CFOs controllers and more get really good with the artificial intelligence tools and so forth. Does that become a priority?
- [05:52]
A
Currently it is a priority, especially with the new models that have come through recently. I mean we, we tend to use Claude Anthropic's model just because it has an Excel add in and it can do a lot of very interesting things that I think are a bit more enhanced than what OpenAIS can do at the moment. Not to say that it's inferior, it's just, it tends to just be more business compatible. But we have worked with some enterprise clients where it seems like they just have a lockdown version of Copilot. Right. They are on a Microsoft shop and I just don't know if co pilot's quite there yet. Plus they also have a huge workforce they can lean on potentially this middle market, small business, middle market. You know, they can do really, really good, cool things with, with some of these, I'll say non copilot AI models.
- [06:53]
B
Thank you. And talk about as you head into 2026, we're already past February and August, middle February. What are you most focused on and excited about Michael, as we get into sort of the, the meat of this year?
- [07:05]
A
Well, right now we're going, we're prepping for our first quarter forecasts so we, we generally try to do a like a 2 plus 10 forecast for what the, the rest of the year is going to look like. And by doing that it really just, you know, aligns leadership together to really talk about strategy and then sort of how tactical do we want to get to that and disperse that to the teams, the operational teams? It just, it builds cohesion with the leadership team. It just, and it sets the stage for the rest of the year.
- [07:38]
B
I love that. And when you look at financial metrics, dashboards, what give us a sense of what leadership teams sometimes miss and what they should be reviewing monthly, you know, but sometimes they're not.
- [07:52]
A
A lot of times it comes down to, I'd say overall it's cash. Even, even, even if you're looking at cash daily for some cash strapped companies, the ones that you know, don't necessarily have a cash issue, aren't looking at it as much and you really need, you really need to take control of your cash because that's the lifeblood of the company. Overall. I would say that's overall, but I think company specific. Sometimes their KPIs just tend to be misaligned. They're not creating KPIs that are specific to their business enough. They're just going with general ones like what does operating margin look like for the month? Or what is our sales like? What's customer success? They're not getting specific enough, depending on what some of their initiatives are.
- [08:39]
B
Thank you. That makes a lot of sense. I mean, it starts with some people do all kinds of sales reports and all kinds of other things. But if they don't have cash coming in at the right level, the right speed, the right velocity, then you can have all the sales you want. But if you don't have cash meeting expenses, you got trouble, don't you?
- [08:54]
A
You do, you absolutely do.
- [08:57]
B
Thank you. And talk about the role of fractional CFOs. We see this evolving in a huge growth market. What do you see as companies face tighter capital, higher rates, growth, greater scrutiny and performance? And you talked about that 30 million cutoff point. A company gets about 30 million sales, they're more likely to have a CFO in place. But then you also have to be careful with those companies that the CFO doesn't want to develop a fiefdom and drive up huge amount of cost to that company as well. Where do you see the role of the outsourced fractional cfo and will that continue to evolve?
- [09:35]
A
I think it definitely will evolve. I think deploying artificial intelligence will be key, at least in the near future. One of the things that we try to do for our clients is not just live in the finance and accounting space. We try to. We tried to really be. We label ourselves as fractional CFOs or outsourced accounting, but really we are operational partners to business leaders. For instance, I got called on to be involved in a trademark dispute for a client. There was a trademark issue. We had to issue coexistence agreements with some other companies in order to keep our trademark. So we had to negotiate deals in order to do that. I get brought into those. I get brought into union disputes. How do we negotiate with the unions and come up with new contracts? So I think the fractional CFO can't just live in finance and accounting. It has to be, it has to evolve to be really good operational partners that are on a fractional basis really has to be more operational and not just finance.
- [10:41]
B
In this sort of evolving finance environment, evolving CFO controller environment. Any advice that you would give to companies trying to Figure out how to handle their accounting and finance needs as well as possible and as efficiently as possible. Any sort of advice that you give to companies as they start to think about outsource, insource to handle things and so forth. Any overall advice?
- [11:07]
A
I think they need to look at things as total spend of your finance function, but also what's the return on investment? There has to be something there where you either have to increase capacity in some way and it doesn't necessarily matter if you have full time or fractional or part time or maybe you outsource even more. You have to look at it as total spend and an ROI perspective and really put together something that works for them so hard. We see we've seen a rash of clients come to us where they said, well we had either a controller for 20 years and they did everything and they optimized it. Now they're retiring and we have nothing like what do we do? And it's like, well, there's a lot of things that we could update here where probably don't even need a full time controller. You could get by with maybe a just a fractional team. Maybe it's a part time controller and part time bookkeeper. We can automate it, you know, a lot more than what you were doing before and we'll save you money in the long run. So there's things like that, you know, companies really have to sort of change the way they think and it's, it's just a, it's just a bit of an education.
- [12:20]
B
Fantastic. No, thank you. And take one more moment. Michael. You're doing a lot of analysis for the 2/10 and setting strategy for companies, helping and set strategy, looking at budgets and expectations for the rest of the year. Talk a little bit about how developed do companies get in their sort of, you know, forecasting, planning, analysis teams and what does that look like? And are you guys in a spot to do a lot of that with companies so they don't have to hire internally three or four people to do FP and a analysis constantly?
- [12:55]
A
Yeah, absolutely. We're set up to do that. Especially with a lot of these middle market companies where we can use artificial intelligence and an API connection to maybe they have a data repository or Even just using NetSuite or Sage. We can link into that and really use their data to really get a base for where we think the, the end of the year is going to look like on a monthly basis and then we just refine it with a leadership team. Do these expectations make sense? What are Some initiatives that we didn't have in I'll say the full year budget that we know are not going to be there that are going to change, you know, what levers are being pulled in order to give us a better sense of what our, you know, one year outlook was to where now we're, you know, I'll say two, three months in, where do we think we're really going to land and what do we need to do to fix it or align back to budget or even improve upon it without new opportunities. So it's, we're set up very well to do that with companies.
- [13:58]
B
No, no, I love that. I think for, for many small mid sized companies, you know and get scared when the CFO says they need to hire a ton of internal staff to do FP and a constantly and so forth and so on. Particularly in that 10 to 30 million dollars range you're talking about. Because I think a founder, a CEO sees it as an ongoing cost without clarity of benefit and outsourcing of that seems just very, very attractive. So you don't have the full time headcount forever while you try and figure these things out.
- [14:31]
A
It absolutely is. You know I, there's a, a colleague of mine who also in this space and they kind of, they've done like almost a reinventing of what FPA is. They almost go after individuals who are very good operational leaders who are somewhat savvy in finance and accounting who know enough to be dangerous and can really and are good with data. They're good with numbers if they can compile data. And now with artificial intelligence it's even easier. So they just try to get problem solvers almost in order to have that, you know, thought process and have that ability to think like that. And then everything else sort of falls into place with either some light training and, and maybe just a little knowledge transfer and they're good to go. So that's, that's sort of the approach we try to take. I think we try to stay closer to the accounting and finance individual who, who has maybe some operational background because it's easier to relate to leadership that way. I mean they're in the weeds. They're doing the day to day operational things. We're there as a partner to them in order to make sure that they're maximizing operations and it translates well into the financials.
- [15:43]
B
Thank you. And Michael, I know I've kept you longer than you expected. I, I the the word Satorius Satorius Strategical Consulting one am I saying it correctly? Second is what's the derivation of that.
- [15:56]
A
Where.
- [15:56]
B
Where does that come from?
- [15:58]
A
You are saying correctly, Scott. Yep, you're good. And it, it's coming from my. When my children were born, in the months associated with them. So. So I just kind of put them together in one and sort of blended together and that's, that's really what it was. When I was, you know, when I was starting to form the company, I tried to figure out like logos, like. Because it kind of has like a Roman vibe almost. So I have the laurel kind of as my logo. So I thought that was fitting as well. So that's.
- [16:30]
B
So let me ask you a question. Is it Sagittarius, Taurus, Aries or what. What are the. What are the. Tell. Help me out. Help me further.
- [16:37]
A
Yep, Sagittarius Taurus. And I just. I. My son was born almost three weeks ago now and he's an Aquarius. So it all kind of fits together. I didn't have to change the name or get a db. Yeah.
- [16:51]
B
I love it. I love it. I am so glad you told me. I thought it was going to be some famous word of some sort and I love that I now understand the actual name and I love it. Michael, what a pleasure to visit with you on the Becker business and the Becker Private Equity PODC in a great business, continued success. What a great pleasure. Thank you so much for joining us.
- [17:10]
A
Yep. Thank you, Scott. Really appreciate it.