Do you need to hire a CFO this year?

Is your company growing at a rapid rate? Do you have a new investor? If you answered yes to either of these questions, it might be time to think about hiring a chief financial officer (CFO).

But how can a CFO help a small business? Aren’t they expensive? Can you do it yourself?

Let’s take a look at the role a CFO plays, when you should be looking for a CFO and your options for hiring a CFO with a small business budget (instead of doing it yourself). I do it all).

What does a CFO do?

CFOs can help you plan, model, forecast and make better business decisions. The CFO looks at your business as a whole – this includes people, processes and systems – and ensures that you together have the correct financial information to plan for the future.

The CFO also considers external factors such as the market, your industry, and any socioeconomic, regulatory, tax and industry issues that may affect your business strategy.

Using this information, the CFO helps business owners and executive teams make informed decisions. They interpret results, evaluate and recommend cost-cutting measures, and more.

In short, CFOs help navigate companies by looking at the big picture.

When should you consider hiring a CFO?

You may be wondering, when in the life of your business is the right time to hire a dedicated CFO?

There is no correct answer to this question. It may depend on the industry you are in and the nature of your business.

For example, if your business has a lot of frequent or complex transactions, this could signal the need for strategic and fiduciary oversight.

Or perhaps your financial data isn’t detailed enough to give you the insight you need to make important decisions. The CFO can help you decide if you can afford to take on new employees, expand your business plan, or invest in new technology.

Rapid growth is another point where small businesses may consider hiring a CFO. Hiring a CFO can help drive expansion across the business and ensure that operations are optimized to handle growth. They can also help make a case for securing capital for growth.

What are your options?

If you think you need to hire a CFO but don’t have the budget to hire someone full-time, you can outsource the function to a management consulting firm.

Also, if budget is really an issue, consider POINTS. Sponsored by the Small Business Association, SCORE connects small businesses with business mentors. Many experienced CFOs like to give back to the local business community and they can offer advice and advice for free.

Simply visit the SCORE website and search for “chief financial officer” in your zip code for a list of potential candidates in your area and industry.

Can you do it yourself?

In a small business environment, the CFO is a trusted advisor. Accepting this role on your own, especially if your business is scaling and growing, is a serious challenge.

Even if you’ve mastered the basics of accounting, to be a good CFO requires broad technology, strategic skills, and financial skills. Perhaps more importantly, you need to have an overview of all the business activities that will help you take your business to the next level.

Breaking away from the day-to-day job of running your business to manage the CFO duties is no easy feat. As your business grows and becomes more complex, do you trust yourself to assess the true risk of your actions, whether financial or regulatory? The role of CFO is usually assigned to someone who has experience in the field and is fully focused on it.

That’s not to say you can’t apply many of the principles CFOs use to better manage your business and personal finances.

Here are just a few tips to help small businesses and freelancers understand their business and finances:

• Keep track of all expenses: This is common for business owners and essential if you are claiming accurate tax deductions. The CFO goes one step further, not only tracking expenses, but analyzing them as well. Whether you use spreadsheets or accounting software, a complete snapshot of your spending habits can help you better manage debt.

• Budget: Once you know your expenses, you can create a budget that allows you to plan ahead. This blog offers tips on how to get the most out of your business budget.

• Lean: Controlling spending is half of the equation to better manage your business cash flow. If you haven’t already done so, focus on lean business methods. That doesn’t mean cheap but creates more value for your customers using fewer resources. Read more about how here: How to Be a Lean, Yet High Growth Small Business.

• Use financial statements to know your worth: These include the income statement, balance sheet, and cash flow statement. Each serves a very different purpose, but each statement is interrelated and looking at them as a whole can help you make smart financial, investment, and management decisions. . Online accounting software can help create these for you.

Are you thinking of hiring help of a more tactical nature? For example, a new accountant or bookkeeper?

This is a brief overview of what an accountant can do for your business.

What accountants can do for your business and what they can’t