Time to Hire a CFO?

Accounting and finance are cogs in the engine of which business runs - but not many of us (business owners) can justify taking time away from sales or customer matters to focus on ‘closing the books’!

There is a point where managing the finances becomes a critical business function or becomes overwhelming. Usually, this is a good thing. In my experience, the companies who need to dedicate internal resources to accounting and finance are those who are preparing for a merger or acquisition, companies with either $10MM in revenue; companies with inventory; or companies with multi-entity (e.g. subsidiary transfer pricing) or international transactions.

Responsibilities. A CFO or controller may oversee all accounting and financial processes including; budgeting, cash flow, profitability, key performance indicators, and the overall profit picture. A CFO or controller should provide a clear measurement of the company’s financial performance, provide insight into the future (e.g. forecasts), and provide insight future working capital needs and capital acquisition strategies. A CFO or controller should be able to implement improved cash management practices that improve cash flow, improve budgeting and forecasting. He or she should be able to perform ‘comparable analyses’ and compare your business to industry benchmarks or similar-size companies in the same geographic area. A CFO or controller should analyze the tax and cash flow implications of different capital acquisition strategies — for example, leasing vs. buying equipment and real estate. Finally, a CFO or controller should implement adequate internal controls (e.g. Sarbanes Oxley) to help safeguard the business from fraud and embezzlement.

He or she may take a seat at the CxO table or the board of directors and may serve as your go-to person for all matters related to your company’s finances. Additionally, he or she may as the primary liaison between your company and financiers (e.g. investors, bank, etc.) to ensure your company is compliant with any capital requirements or loan covenants.

Full Time or Part Time. Hiring a full or part-time CFO or controller represents a major commitment in time, effort and expense. CFO’s typically command substantial high salaries and attractive benefits packages. First make sure you the budget to compensate a CFO. If you’re committed to hiring a full time CFO or controller, consider retaining a specialized and executive recruitment firm like, Adam James. (Ken and John are the best!)

If you’re unable to commit to hiring a full-time role, consider a part-time hire and contract from FirestoneCFO. The contract will keep costs ‘variable’ as well as provide the benefit of working with a CFO without the salary and overhead. Consider whether your company has grown and needs more than simple bookkeeping and basic reporting. And, if you can relate, it may be time to add a CFO or controller to look beyond day-to-day accounting to a more holistic planning and measurement of the company’s financial performance.

Despite being indoctrinated at the University of Chicago, an institution known for developing CFO’s and other finance talent - a good CFO can make all the difference in your company’s current performance and its future! As always, if we can help contact us.