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.

CFO Services? What is that?

Since I graduated college, I find that more often than not, I am constantly explaining what it is I do for a living to my friends and family – most of which still have no idea.  Whether I was an auditor or a financial analyst or a controller, I usually just responded with:  “I’m an accountant” or “I’m a CPA”, and I probably always will to some degree.  But if I really answer their question, it’s that I provide part-time CFO services to small businesses. 

I can usually tell how much of an accounting background a person has by their next question.  I will either hear:  “What is a CFO?” or “So, what type of services does a part-time CFO provide?”

A part-time CFO (or Chief Financial Officer, in case you are in the group that asked the first question) is an outsourced consultant to a business that needs an accounting professional.  Part-time CFOs scale their services to what a business needs and can afford. They are flexible in that they can work within all levels of the accounting department – as CFO, controller, accounting manager, and/or staff accountant. Part-time CFOs provide support in a variety of ways from strategic planning to all elements of financial operations and financial reporting.  They can also provide project-based support.

Since the recession, there has been an increasing trend in the use of part-time CFO /Controllers.  In general, a business owner may decide to outsource their CFO/Controller when they find that their business is need of a financial professional in some capacity - but they may not need to hire someone full time.  A full time CFO or Controller can demand a hefty salary which isn't feasible for many growing businesses - nor is it needed.  By contracting a CFO/Controller, a business owner can add an experienced financial professional to their executive team at a fraction of the cost.

The services I provide will vary from client to client.  It may range from financial reporting and analysis, development of a budget, monitoring of costs against the budget, short or long term forecasting, cash flow management, profitability studies, etc.. The list goes on….Regardless, I am one of the strange few that enjoy all the accounting profession has to offer and CFO services touch on a variety of areas in finance and accounting. 

Visit my website at www.mytrustedcfo.com