Accountant Top

When to Consider CFO Services

While accounting skills are certainly helpful, they aren’t typically a requirement to start a business. To start a small business, entrepreneurs need:

  • A great idea
  • Self-reliance
  • Lack of fear
  • Fortitude
  • Energy and commitment

As businesses begin to make money, accounting becomes a bit more of a priority. Many entrepreneurs hire a part-time bookkeeper or outsource the work for a firm like ours. As companies get larger, they may hire an accounting manager to oversee things. The thought of hiring a CFO frequently doesn’t enter the mind of CEOs for most small- to mid-size businesses.

What do CFOs do anyway, that an accounting manager or controller doesn’t do? Essentially, CFOs help organizations navigate between their long-range goals and cash-flow reality. They take ownership of the company’s profitability, ensuring the financial reality is considered before each strategic decision is made. CFOs lead the finance and accounting functions, act as a steward of the company’s finances, develop key performance indicators, liaison with bankers and other financial professionals, develop financial forecasts and models, and provide tax-saving strategies. CFO’s share in the long term company vision and help on the path to get there.

While these activities aren’t absolutely necessary to run a business, having a CFO’s services, even part time, can make a big difference in a company’s success. Here are the top deciding factors for when to consult with a CFO:

  • Revenue. When you have a revenue goal and need help getting there, a CFO may be helpful.
  • Headcount. When you hit 50+ employees, legal and compliance rules start to kick in. You need to make decisions, such as when to hire a contractor versus an employee, whether your administrative staff ratio is in line with your direct cost count, and more. A CFO’s perspective can be a big asset.
  • Growth. If your business is growing between 20-25% a year, you may want a CFO on hand to keep spending in line with growth.
  • Complexity. The more locations, the more products or services you offer, and the higher the cost of your product, the more complex your business is. A financial expert, such as a CFO, can help ensure you are on track.
  • Rapid decline. If your steady-to-growing business suddenly tanks without notice, a CFO can help determine the cause and ways to respond.

CFOs bring a unique perspective that can help really impact the bottom line. Yet, only the most forward-thinking firms hire a CFO, even part time.

If you are need of professional financial advice but aren’t ready to pay the full-time salary of a CFO, Fourlane offers monthly and quarterly CFO services. Contact us today for a free consultation at 1-800-931-2120.

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