When should I hire a CFO?
If you are a small business and have never had a CFO before, you may be wondering when is an appropriate time to invest in a CFO hire. There is not a particular sign that points to this need, but the following are good things to consider if you are ready to bring someone on to help you at a higher level.
If you are spending a lot of time having to learn financial matters, and not spending time on your business, it might be a good time to consider hiring help. It might not even necessarily be a CFO. You may need a bookkeeper first to complete the day-to-day accounting, and hire a CFO to come on a monthly basis to reconcile and help you analyze your financial statements.
The biggest complaint I have heard from CEOs is that they need financial information. They try to spend time learning and reading financial information but do so with frustration. A CFO will come in, and learn about your organization, and give you the information you need, and so much more. They will present the standard reporting, but also give you more specific information based on whether you are a services, products, manufacturing, or nonprofit organization. The industry you are in dictates how you look at your financial information, and what information is most useful to you.
In my experience, organizations over five million in revenues tend to start to need additional higher level help. At that point, they already have bookkeepers and accounting staff on their payroll, but they may need help with securing loans, expanding locations, creating projections, etc. They want to grow, but feel limited, and don’t quite understand how they are doing financially. They require additional reporting needs that the current staff aren’t able to or don’t know how to provide. They need the expertise of having a strategic financial partner. This is a perfect time to hire a CFO to come in and help them develop their financial processes and reporting so that they can make better business decisions.
The issue I see the most is that organizations hire a CFO later than they should have. A good CFO will be able to come in and help, but having a partner who can deal with the financial matters is of utmost importance. Remember that you came into business to work on your business so don’t spend so much time working in it. The business world moves fast, and not getting the information you need when you need it can really slow down business, and let your competitors get ahead.
Contact us today to get a consultation on your business needs. Email us at kaolee@cfodirectllc.com.
