Fractional CFO services in Sherwood Park

The CFO work sits on top of compliance that still has to be right: the T2 and AT1, GST returns, payroll remittances and T4 slips, CCA schedules and instalments to both governments.

Cash between the big jobs

Contractors serving the refineries and petrochemical plants in Strathcona County often run payroll for a large crew weeks before the customer pays. A shutdown can double headcount for a short period, with overtime, equipment rentals and materials all paid out before the first invoice is approved. Then the work stops and revenue falls just as receivables finally arrive.

A rolling cash forecast, built from the job schedule, payroll calendar and expected payment dates, shows the gap before it opens. It turns the operating line from an emergency into a planned tool, and it shows when instalments, GST remittances and equipment payments will collide. See cash flow management.

Plan for the slow year before it arrives

The useful exercise is not forecasting activity. It is setting out what happens at defined levels of decline — revenue down a quarter, down a half — and what has to change at each, in what order and by when. Which costs are truly variable, which are contractual, which equipment could be released, and what the covenant position looks like at each step.

Done in advance, that is a short document with trigger points. Built during a downturn, it is a series of late reactions made under pressure. The difference is mostly when the thinking was done.

Covenant headroom is something to manage, not discover

Covenants are calculated from year-end figures using the credit agreement’s own definitions, and a company can breach one without any operational failure: earnings fall and the ratio trips. Finding out after the statements are issued leaves little except negotiating from a weak position.

Tracking the calculation quarterly, on the agreement’s definitions rather than statement captions, shows headroom narrowing while there is still time to act. Approaching a lender early with a plan is a very different conversation from being called after the fact. The Sherwood Park financial statements page covers the reporting side.

Pricing on fully loaded cost

Service companies often price against what the market seems to pay and discover the margin afterwards. Building a fully loaded cost for each crew, unit or service line — labour including travel and standby, consumables, maintenance, mobilization, the equipment charge and a share of overhead — turns pricing from an observation into a decision.

It also shows which work is worth having. In a soft market the temptation is to take everything, but work priced below variable cost uses cash faster than idle time does. Knowing where that line sits, service by service, lets you bid hard where you can afford to and decline where you cannot.

Capital discipline in a strong year

The damage done in a slow period is usually decided during the busy one before it. Equipment bought at peak prices, staff added for demand that does not last, overhead built around a temporary revenue level: each looks sensible while work is plentiful. The discipline is to test every significant commitment against a mid-cycle revenue level, and against the debt payments it creates at the bottom of the cycle rather than the top.

When it is not the right spend

If the books are behind or job costing does not exist, fix that first. A forecast built on unreliable data produces confident output that is wrong. A company with simple operations, little debt and an owner who knows the numbers may not need a CFO at all. If the need is the monthly close and reporting rather than strategy, a fractional controller is the better fit.

CFO support earns its place when there is real debt with covenants, a major capital decision pending, rapid growth in headcount, or a slow period that has already started.

What it costs, and how it works

Fractional CFO work starts at $2,500 a month. A fractional controller, for the close and reporting rather than strategy, starts at $1,500 a month. Both are scoped and priced in writing before any work begins. See the published fees.

Engagements run remotely by email, video and secure upload, with a monthly or quarterly review meeting. There is no Sherwood Park office. Alberta corporate income tax is administered provincially, so the compliance side includes the AT1; see the Alberta tax facts page.