Does my business need a CFO or Controller?

Unfortunately the answer to this question isn’t as easy as saying that once you hit a certain revenue figure, its time to hire a CFO or Controller. The fact is, you could have over $10M in revenue and not need a financial executive if your business is profitable, relatively simple, and predictable.  However, you may have only a few hundred thousand in annual revenues or less and need a part-time CFO/Controller if you aren’t seeing profits, are having difficulties managing cash flow, or are spending too much time sorting through numbers and not enough time growing your business.

Business owners are sometimes hesitant to invest in in CFO services.  This is mainly because it’s difficult to determine your return on investment since there sometimes isn’t a direct correlation between profits and the services that the CFO provides.  This is true of many “overhead” type rolls such as IT, HR, and Accounting.  Assessing the value of a CFO/Controller is more qualitative than quantitative.  Will adding this person to your team increase the efficiency at which your business runs? Will it provide your business with direction for the future?  Will it give you knowledge that you otherwise wouldn’t have had to make better business decisions?

Although this is not an exhaustive list, here are some indicators that your business may want to invest in a part-time or outsourced CFO/Controller:

• You do not have a budget and aren’t sure the best way to put one together.
• You do not have timely or useful financial reporting.
• You are not profitable and need help finding ways to become more profitable.
• You have difficulty managing and predicting cash flow.
• You have a long-term goal for your business, but no financial plan on how to reach it.
• You are starting to grow and now want advice on how to best manage your profits.
• You aren’t sure of the overall health of your company and want assurance that its financially solid or want to know where there may be financial risk.
• You find that you are spending too much time trying to manage your company’s finances and not enough time trying to grow your business.
• You have a person on your team who is doing the bookkeeping and account reconciliations, but they need additional training and their processes need improvement.
• You  are trying to reach a certain target whether it is to break-even, see a certain profit margin, hire more employees, or pay off debt and need help creating a plan to accomplish that goal.
• You want someone to monitor your business’s performance on an on-going basis and report their findings.
• You are contemplating buying out another small business or investing in another product or service line and need someone to perform due-diligence or assess the value of such a transaction.

For more information, visit my website at www.mytrustedcfo.com.