A Risk Register Framework for Fractional CFOs to Deploy with SMB Clients

Small business owners understand risk in theory. In practice, risk stays in their heads until something breaks - a cash crunch, a client who stops paying, a tax liability that sneaks up.

A risk register is a tool that punches above its weight for SMB clients. Not as a compliance exercise - as a lightweight decision tool that gives leadership a place to track real risks, assign ownership, and review them on a schedule a small team can actually maintain.

Here's what I use.

What the register should look like

If it takes more than a page, your client won't use it.

A "minimum viable" risk register is a simple table with these columns:

• Risk (short name)
• Category (cash, customer, ops, finance, people, legal)
• Description (one sentence: what could happen?)
• Likelihood (1–5)
• Impact (1–5)
• Score (Likelihood × Impact)
• Owner (one person accountable)
• Trigger (what tells you it's starting?)
• Mitigation (the action they'll take)
• Review cadence (monthly is enough for most)
• Status (green / yellow / red)

That's it. The goal is clarity and follow-through, not documentation for its own sake.

10 risks worth deploying early

These are the risks I build into the first version with most clients - common, measurable, and expensive when ignored.

1) Working capital timing

Trigger: Cash dips below minimum threshold, or they're floating bills waiting for payments.

Mitigation: Weekly 14-day cash lookahead; set a minimum operating cash threshold; delay nonessential spend when near the line.

2) Accounts receivable aging

Trigger: Over-30/over-60 receivables exceed a set percentage of monthly billings.

Mitigation: Automatic invoice reminders + weekly follow-up cadence; tighten terms for repeat offenders; require deposits for new clients.

3) Customer concentration

Trigger: One client represents more than X% of revenue or gross profit.

Mitigation: Set a concentration limit as a strategy metric. Build a pipeline target tied to reducing reliance.

4) Margin erosion from scope creep

Trigger: Projects routinely run past estimated hours, or delivery effort rises while revenue stays flat.

Mitigation: Define scope boundaries; bill change orders faster; adjust pricing for work that consistently overruns.

5) Tax liability timing

Trigger: Payroll/sales tax/VAT due dates cause recurring cash stress.

Mitigation: Separate tax set-aside account; weekly transfer rule based on revenue; calendar reminders and owner review.

6) Debt service pressure

Trigger: Debt payments consume a rising percentage of cash, or they're relying on a credit line to cover normal operations.

Mitigation: Track debt service in the cash lookahead; renegotiate terms early; build a payoff plan tied to cash thresholds.

7) Vendor dependency

Trigger: One vendor is required for delivery, and lead times/pricing are unpredictable.

Mitigation: Identify alternates; negotiate secondary supply; build lead time into the operations calendar.

8) Payment and approval controls

Trigger: One person can initiate and approve payments, or bank access is too wide.

Mitigation: Set approval thresholds; separate "initiate" vs "approve" when possible; monthly review of bank users and permissions.

9) Financial reporting reliability

Trigger: Month-end reports arrive late or can't be trusted; reconciliations aren't current.

Mitigation: Define what "month-end close complete" means (bank recs done, key accounts reviewed, balance sheet sanity check); assign due dates and ownership.

10) Single point of failure (people/process)

Trigger: One person holds critical knowledge and the business stalls when they're out.

Mitigation: Document the process that keeps the business moving (billing, collections, payroll, bank access); cross-train one backup.

Scoring without overcomplicating it

Use a 1–5 scale. Keep definitions simple:

Likelihood:

• 1 = unlikely this year
• 3 = plausible / has happened before
• 5 = already happening or happens regularly

Impact:

• 1 = annoyance, recoverable quickly
• 3 = meaningful cost or disruption
• 5 = threatens payroll, reputation, or continuity

Multiply them. You don't need perfect math - you need a sorting mechanism. The point is to answer: what deserves attention this month?

A simple rule:

• Score 12+ → mitigation action scheduled this month
• Score 8–11 → monitor weekly; mitigation planned
• Score ≤7 → monitor monthly

What makes it stick: triggers, owners, and a monthly review

A risk register fails when it becomes a document no one owns.

Two requirements make it usable:

Every risk has one owner. Not a department. Not "the team." One person.

Every risk has a trigger. A trigger turns risk into a measurable signal - and prevents the "we didn't realize it was getting bad" conversation.

Then run a monthly review. Keep it to 20 minutes:

• Review the top 5 risks by score
• Status update: green/yellow/red
• Confirm mitigation actions (done/not done)
• Update triggers and thresholds if needed
• Add/remove risks based on what changed

That's how risk analysis becomes part of management instead of a one-time exercise.

Example entries (what "good" looks like)

Risk: AR aging rising

Trigger: Over-60 invoices exceed 15% of monthly billings

Mitigation: Weekly collections block; automatic reminders; deposits required for new clients

Owner: Operations lead (or owner)

Risk: Customer concentration

Trigger: Top customer exceeds 25% of gross profit

Mitigation: Pipeline goal tied to reduction; pricing review; diversify offers

Owner: Owner / sales lead

Risk: Payment controls too loose

Trigger: Same person initiates and approves payments; multiple bank admins

Mitigation: Approval thresholds; monthly permission review; dual approval for large transfers

Owner: Owner / finance lead

These are boring. That's the point. Good risk controls prevent problems. They don’t create paperwork.

Closing thought

A risk register is one of those tools that looks simple but changes how a leadership team thinks. It turns vague anxiety into specific, owned, reviewable items.

If you're working with SMB clients who are growing but still flying by gut on risk, this is a framework you can deploy in a single session and build from there. Three months of monthly reviews usually gets the client hooked.