A Chief Financial Officer (CFO) plays a critical role in every company, supporting the CEO in making optimal financial decisions that can set a business on the path to success… And making the wrong decisions can lead to financial disaster. In this episode of The Agent of Wealth Podcast, host Marc Bautis is joined by Bryant Tolles, the owner of KTT Global Advisors. Together, they talk about how he conducts business as a virtual CFO.
In this episode, you will learn:
- How Bryant created the One Minute CFO Video series to discuss how business finances really work.
- What a Virtual CFO does and how hiring one can help set your company up for success as well as save you money.
- When starting a business and what entity structures you should consider as well as what state you should create your business in.
- How Bryant got started with a niche in bitcoin what the future holds for the currency.
Resources:
One Minute CFO Videos | [email protected] | 408-391-4475 | Bautis Financial: (862) 205-5000

Bryant Tolles, the president of KTT Global Advisors, which is a full service financial consulting firm that assists individuals and businesses with their tax, business advisory and accountant needs. Bryant also has a specialty as a virtual CFO in crypto currency expert, which we will get into a little bit later.
How to Determine If Your Business Needs a Virtual CFO
At what level would a company need a virtual CFO? Is there a certain revenue, growth, certain number of employees, that would dictate the need?
It really depends on the complexity of your organization more than anything else. You can have very small companies that have an international client base, they are negotiating complicated contracts, they are having to deal with investors that need specific reporting or creditors that need certain reporting and covenants to adhere to, and you need some senior leadership. That could be a small company that has to deal with all of that. And then obviously, when you get up into large, multi-million dollar companies, then they need somebody solely focused on that role.
What Does a Virtual CFO Do?
I like to say I do whatever a CFO does. I just am not onsite. And, I’m not necessarily full-time. I might be in there temporarily. The idea of a virtual CFO to me, strictly means you’re virtual. You’re not physically present, but I really think it means that any sort of role that is not full-time permanent in the office. I’ve got clients where I’ve helped them out for three months on a more intensive basis and then others that I’m giving them 5 to 10 hours a month for the last couple of years. So, it really depends on need. They know that they’ve got someone who’s been around the block, so to speak, and done a lot of the more senior types of things that a CFO would do.
Would you help the company out with things like putting a budget together? Planning, analysis, reporting- those types of things?
Yes, all sorts of stuff like that. I can dip into legal light, though I’m not an attorney. Obviously, I’ve got the knowledge of the accounting side, which is really the foundation from a business and a finance perspective. It’s just getting the books right. I know the rules. I have dealt with both international and domestic accounting standards. I’ve done SEC reporting. I worked with investors, VC investors, cap tables, fundraising and all sorts of stuff like that. So it’s really need-dependent. One thing I do, is go to these meet-ups and network with people. When I go into the city, sometimes I’ll talk to entrepreneurs and you go up there like: hey, what are you working on? What do you need? What are your needs? That’s usually a good way to figure out what they actually might need help with. One thing they always say is: I need money. Can you raise money for me? No, that’s your job. I can help. I could provide the backup, I can help you present, but you need to have the contacts and be able to pitch the product.
I’ve worked at small companies and at large ones. You get a sense over time as to what the various needs are at certain stages of growth. In my case, sometimes people come to me with specific projects: I need this done, I need an evaluation done,I need a business plan. I did a business plan for a client, and it was really: here’s this idea that I have. I’ve got an investor, good. But I don’t really know what the business looks like from a financial perspective. So,you talk about helping them think through these things, and I basically had to model out revenue streams, document all the various costs and expenses and build a financial model for the business. That’s one thing you can do. Another thing is that they just need someone to oversee, keep things organized. There are a lot of companies that I support, that want to do their accounting, but they want somebody at the end of the quarter that can go in there and look at their financials, make sure that they’ve got everything accounted for, answer tax questions. I can answer questions about that. But just have somebody that’s got that vast knowledge base.
Will you get questions where someone needs help with hiring and whether they can fit it into the budget?
Definitely. I provide the structure for them to be able to make those decisions. I’m not going to tell them what they can and can’t do. But I’m going to say: based on what we’ve talked about, based on the forecast we put in place, if you do that, then here’s the impact. You’re gonna push out profitability, you’re gonna trip your covenants, you’re gonna do something. And that’s really what one of the main roles of a senior finance person is; it’s just to have financial money-based visibility on the business.
And I know you mentioned a lot of companies are looking to raise money. Do you also help on the debt side?
I have raised debt. It’s a similar process; you’re creating a pitch and you’re going usually going out to a different set of funders. That’s one of the decisions. I worked in a company once where they basically tapped out their ability to raise equity. Their existing funders didn’t want to put any more money into the company, not that it was a bad company. So we said: let’s go out and see if we can raise some debt to carry the business over to profitability or liquidity. So that’s what we did. That sort of decision is like: what’s the proper balance? Inequity is something that CFO can help you with.
And usually you get engaged with all different types? Some might be fixed projects, some might be for a couple hours long? Yeah. More evolved, more intense?
That’s the one of the nice things about it: that you have the variety. Rather than focusing on one company and one set of issues, and then having it repeat over and over, what you’re doing on a daily basis is constantly changing. I’ve got ongoing clients and one time projects.
The One Minute CFO
I know on your website that you have something called : “The One Minute CFO,” which you talk sometimes longer than a minute. . I went through them, and I think a lot of them are the same questions that I receive from people I work with (they might be small business owners). Can we go over a couple of them now?
What Entity Structure Should You Create for Your Business?
So this one- and we’ll preface it by saying no one is giving any legal and tax advice here- but the most common one I saw on that list is by far: if someone is starting a business, what entity structure should they create? Then, what tax structure should they create? The most common ones I come across are people deciding LLC, S Corp for taxes being a partnership. How does someone make that decision in terms of deciding what entity structure that they should create?
Well, I’ll sound like a lawyer and I’ll say that it depends. Really, the most basic legal structure, is a sole proprietorship: I start a business, I set no legal entity up, I just start doing business. You can do that. There are benefits to having a legal structure in place, especially as the company grows and you bring a payroll and everything- then you kind of have to. Most people start out as an LLC. I think that the whole S Corp thing (not to sound too cynical), but I think sometimes it gets pitched by lawyers as: here’s what you really need to do; because they can charge an extra fee for setting up the S Corp. The benefits to the S Corp are- and just to expand upon the S Corp. People confuse an S Corp as being a legal status. It is just a tax selection. You could have an LLC that’s an S Corp. You can have a corporation that’s an S Corp. So really, you’re gonna set up an LLC as a legal entity or corporation. In some states, you can actually have a partnership as an entity. Let’s say you set up an LLC. Really, the decision around the S Corp versus partnership versus pass-through entity; it revolves around payroll taxes. That’s the big thing, in that there are some payroll tax benefits as an S Corp that owners/members of an LLC can obtain by creating an S Corp. But then, you have to look at the flip side of it: you have to run a payroll, you got you got a file an 1120-S, you have to file a return, you have to do additional filings. So, time and money, you have to weigh that against the decision. Simplest form, even if you have an LLC as a single person, you’re just going to run through your schedule on your 1040. It’s very simple.
Changing the Tax Status of Your LLC
How easy is it or hard is it if someone sets up a tax status one way for their business and then wants to change it?
You can. There are a couple of forms that say you’re starting from an LLC. There are a couple forms you would file with the IRS to either select an S Corp. Or, you could be taxed as a C corporation or as an LLC, if you wanted; there may be some benefits too that, depending on the business. There are also simply time rules. You’re really supposed to do it 2 and ½ months into the fiscal year where you want to have that election be made. But, yes, you can do it. You can make those changes. Sometimes they’re some adjustments to the accounting for the tax books that you have to make if you go from one to the other, but it’s all something that a CPA can investigate for you. It’s hard to generalize; it’s really situation-specific.
What State Should You Create Your Entity In?
The other question I get a lot is: what state should I create my entity in? You hear Delaware and Nevada are great states for doing it. We live in New Jersey, which doesn’t have as good of a reputation as being a business friendly state. Does it make a difference what state you’re creating your entity in?
If you’re a small business owner just starting out and you’re like: all right, I’m gonna create this business. It’s going to provide me a nice source of income. I’m not trying to take over the world, just set up an entity in your state. You don’t need to a Delaware LLC, for instance, where you would have to deal with paying franchise taxes down there. Plus, you’re a New Jersey business. You’re still going to have to file a New Jersey return. Where Nevada (and actually I’ll describe Nevada from a from a crypto perspective) and Wyoming’s trying to make a big name. There are regulatory ease, and for some of these states, the filing fees are lower. The non-Delaware, non-local states are just trying to create a source of revenue specifically on Delaware. The reason that a lot of companies (at least the space that I come from- the start-up space) will choose Delaware is: well, first of all, it’s really kind of a brand name thing. I worked with a start-up several years ago that started out as a California Corporation. When they started attracting VC investments, they said: you know something, we need to be a Delaware corporation. The reason that Delaware has such a good reputation is that the court system there is very efficient. It tends to be business friendly and a chance record system. When disputes arise, they could be processed quickly and efficiently. There’s such a large amount of case law that it’s predictable; you know how things are going to happen. But with that said, the issues that most small businesses are going to deal with when they run into legal problems, they’re not going to get sued in Delaware. It might be an employee issue and that’s going to all be litigated at the local level. Big, large companies, when you’re dealing with like M& A and big multinationals, those kind of issues are going to end up in Delaware courts. Then, you want to have that predictability. Again, like I said, it’s a marketing thing, too. For public companies, people are like: Oh, yeah. Okay, that’s a Delaware corporation. I know what that means; for the branding thing.
Cryptocurrency
We talked earlier about your expertise in crypto. How did you get that? Was it just something that you are interested in investing in and all of a sudden your CPA financial side kind of married the two? Or was there another way you got into it?
I was interested in more from a technological aspect of a math guy/computer guy. This is kind of interesting,let’s see how this works. It is not from an investing standpoint. I am not an investor. I rely on people like you to handle that. So when I came out here, I moved back to the East Coast in 2015 and I started out consulting. The crypto craze took off in 2017. I was like: this feels a lot like another tech boom like I experienced down in the Silicon Valley. I started going to meet-ups in the city and talking to people; it was really exciting. One need that I saw was that people from a finance perspective and accounting perspective (especially from a tax perspective), didn’t understand how this stuff was treated. So I started marketing myself as a crypto tax expert, and that led to some business, I wrote some articles, I sat in on panels. I joke that about the time the cannabis business was taking off and states were starting to legalize, I decided to build a business around crypto instead of cannabis. I probably should have picked cannabis, because that’s-from a business perspective- has a little more sustainability. I just found that the issues that you run into in the crypto space from accounting and finance are really interesting, so I decided to have a portion of my business based on that.
What do you see in terms of next steps with adoption of crypto? Do you see it taking off?
When everybody was hearing about Bitcoin a couple years ago, it was 100% a bubble. It’s just like we saw with the dot coms and people talk about the tulip craze in the Netherlands and all that. From a technological perspective, it’s very interesting, and it has some applications. For people who don’t understand what’s underneath it, it’s basically a distributed database.You have a database on a group of data records and they replicate it all over the world, or any servers holding that. What that means is that if you make a change to the database, it gets replicated everywhere. There’s not one specific weakness or point of attack. It allows for transactions between two parties to be done without an intermediary, so that could be handy for money transfers; that’s one of the applications people are looking into. But, the answer to your question briefly from a technological stage, it’ s very early on. I think that what you’ll see is over the next 5 to 10 years, as the technology evolves, it has scalability issues that they’ll find more and more ways that are gonna be able to use Cryptocurrency and the underlying Blockchain technology. It’s like when the dot coms were coming out, they were going to take over the world, there are going to be no more retail stores. It hasn’t quite done that, but it’s still going to kill the banks.
From a tax perspective though, and even from the investment tax perspective, is it treated just like any other capital asset, like a stock?
Pretty much. I don’t want to broadcast this too much, except for when I’m on the podcast, but the taxes for it are really not as complicated as people want to make it. It’s treated as property by the IRS. And I’m speaking totally domestically. There’s all sorts of variations when you look at tax treatment around the world, but from the IRS, it’s treated as an asset. You’re going to report gains and losses on your schedule. D. There are some weird situations that come up in Cryptocurrency. If you hold a certain Cryptocurrency token and it forks, for instance, you might all of a sudden end up with some of another Cryptocurrency. That doesn’t happen, really, with stocks, you have to stock split. But from the Cryptocurrency perspective, how do you handle a situation like that? How do you handle a situation where you buy a token and then the founders take the money and run off to Bermuda or some other place that’s even harder to extradite people from and take all of your money? When do you write it off? When is it a loss? So, there’s some funny situations that come up, but generally it’s pretty straightforward. The problem that a lot of people run into is that unlike equity trading, you may have a stock trading account. You get a form from the IRS or from the company at the end of the year that says: here’s your gains and losses, this is how you report them. There is very little mandatory reporting from these crypto exchanges, and they’re all over the place. They’re all over the world, they report data in different formats. I’ve done a lot of projects where somebody’s like: I need to report my gains and losses. Can you help me? 90% of it is getting all of the data together and running it through a crypto-specific tax program that calculates gains and losses, and figuring out where there might need to be some adjustments. You have to play detective. That does not really happen in more formalized markets.
Are you seeing a lot more people investing in it?
No, it was crazy in 2017. People were speculating, they were going in and going out, doing a lot of trading. Now it’s an asset to invest in. It is a store of value. If nothing else, Bitcoin isn’t going away. Bitcoin is a store value. The price fluctuates between 7,000 and 10,000. It’s something to complement your investments, not be the entire investment.
As far as currency, do you see someone being able to walk into Dunkin’ Donuts and buy a coffee with Bitcoin?
Specifically, from a technology perspective, Bitcoin isn’t very good for that; it’s slow. Eventually, I see the potential if the technology evolves. If the distributed ledger Blockchain technology evolves, there may be a role for that. But that was one of the things they always say, but nobody was doing that. It just doesn’t really work that well.