The intersection of financial management and fraud prevention is an area where many small businessesface significant challenges.
On a recent episode of the Building the Premier Accounting Firm podcast, host Roger Knecht spoke with Greg Kyte, a fractional CFO who specializes in helping independent physicians and other business owners protect their financial health. Their conversation highlighted practical strategies every business can use to strengthen oversight and reduce the risk of fraud.
Why Small Businesses Need a Fractional CFO
Knecht and Kyte both emphasized that technical expertise in one field—such as medicine—doesn’t automatically translate into business management skill. Independent physicians often own valuable real estate and operate through complex LLC structures, but lack the financial oversight to ensure money is being managed properly.
That’s where a fractional CFO steps in. As Kyte explained on the podcast, his role isn’t just about keeping the books, but about creating systems that protect business owners from embezzlement, mismanagement, and missed opportunities for growth. Universal Accounting Center offers CFO training through its Profit and Growth Expert program, which provides accountants and financial professionals the skills to fill this critical advisory role.
Transparency as the First Line of Defense
One of the key themes of the discussion was transparency. Knecht noted that too many business owners rely on “handshake deals” or trust that everything is being handled correctly, without requiring formal documentation. Kyte added that this lack of transparency creates blind spots where fraud can thrive.
He shared an example from his own work where a predecessor exploited weak controls to misappropriate over $600,000 through undocumented loans and unauthorized payments. According to Kyte, this level of fraud was only possible because of missing paper trails and inadequate reporting systems.
Practical Controls for Small Businesses
The podcast outlined several concrete steps to reduce fraud risk and strengthen financial management:
- Separate duties: No single person should control all aspects of financial transactions.
- Require documentation: Every agreement, loan, or distribution must be clearly recorded.
- Classify workers correctly: Misclassifying W-2 employees as 1099 contractors can create compliance risks.
- Implement comprehensive reporting: Regular, transparent reporting ensures stakeholders understand where the money is going.
- Review financials actively: Owners must not just receive reports, but also engage with the numbers.
Kyte stressed that clear communication is just as important as accurate accounting. Reports should be designed in a way that business owners will actually read and understand, instead of being buried in jargon.
Turning Complexity into Clarity
Many of Kyte’s physician clients own buildings structured under LLCs, with rent collections, loan payments, and distributions tied to square footage ownership. These arrangements can get complicated quickly. But as he explained on the podcast, a strong CFO function translates this complexity into clarity—ensuring owners know exactly how their money is flowing, and that every dollar is properly tracked.
The Takeaway for Small Businesses
Fraud prevention isn’t just about catching bad actors—it’s about building systems of accountability that make fraud much harder to commit in the first place. As Knecht summarized during the discussion, when transparency and controls are in place, both owners and employees are empowered to operate with confidence.
Kyte’s experience underscores that even highly skilled professionals can be vulnerable without the right financial safeguards. Whether through a fractional CFO or strengthened internal processes, small businesses must prioritize both clarity and accountability in their financial practices.
Next Steps
For financial professionals who want to expand into advisory roles, Universal Accounting’s Profit and Growth Expert program is designed to provide the training and tools needed to serve as a trusted fractional CFO.
For business owners seeking additional insights, Roger Knecht’s book Your Profit and Growth Expert is another valuable resource on how to maximize profitability and implement strong financial strategies. To learn more about CFO training or advisory services, call 435-344-2060.
