It’s a Catch-22. The small business you shed time, sweat and tears over has taken off like a rocket. These should be happy, profitable times.
However, as you struggle to stay abreast of the day-to-day operations, cash flow issues and financial statements, you can’t shake the nagging thought that you could use some expert assistance. And shouldn’t someone be planning for future growth? Someone needs to draw the overall financial picture to allow you to make good decisions to continue growing. For many companies, that someone is a CFO or chief financial officer.
But a full time CFO isn’t always a good fit for every company. So if you’re curious about the differences between in house CFO or an interim CFO, we are here to help guide you through your decision-making process.
CFOs bring financial management and order
Job search site indeed.com spells out the CFO’s job description, top duties and qualifications as
“A CFO is responsible for overseeing the financial operations of a company and making decisions based on the company’s financial stability. Their duties include monitoring cash flow, meeting with the CEO to discuss the best practices for company finances and coming up with strategic plans to improve their company’s overall financial health.”
By definition, a CFO could provide you with the much-needed financial projections and analysis to help grow your business.
They could work closely with you to identify long-term growth opportunities for your business while helping you avoid potential pitfalls.
The problem with hiring a full-time CFO
You realize you need advanced financial assistance, so what’s the hold-up? The flashing red light in front of your plan is probably cost. Can you afford a full-time CFO and if not, what are your options?
Can your small business afford a full-time CFO?
On the low end, a full-time CFO salary starts at around $100,000. (Outsourced CFO services cost: what you need to know) Don’t forget to add in company benefits, bonuses and taxes.
After considering this, a small business owner also needs to look at the projected workload for this position. Does your business need at least 40 hours of strategic financial help each week? If the answer is no, your small business can’t justify hiring a full-time CFO.
You need to look at options
Consider outsourcing CFO services. You could also leverage CFO services on a fractional or part-time basis. With the rise in popularity of remote work, another option could be to hire a virtual CFO that fits your needs. Working remotely, they could even be located outside of your typical commute area. We discuss the available options in more detail here (The hunt for the best outsourced CFO services for your small business)
A great start would be contacting a CFO services provider like Ascension CPA to discuss outsourcing a CFO for specific projects or contracting for a particular time period.
Benefits of hiring a part-time CFO
In addition to the cost savings from hiring outsourced CFO services instead of a full-time CFO, there are many other benefits. By hiring a part-time CFO:
- You can gain full-time expertise without a full time commitment. Hiring a full-time employee takes a significant commitment of time and resources. Using outsourced CFO services can be done on a contractual or hourly basis and if the relationship doesn’t work, a business can end it easily.
- Your business will see a risk reduction. An outsourced CFO can manage cash flow and build a strong financial system of checks and balances to help protect your business from fraud or theft.
- You reduce the onboarding time. Forbes notes that fractional CFOs typically are experienced professionals who focus on strategy and can get up to speed quickly to begin effectively tackling your problems and implementing solutions.
- You tap new ideas. Part-time CFOs typically have other clients, enabling them to bring a wide variety of experiences to the table.
If you hire a part-time CFO from an accounting firm or a staffing agency, you may gain shared insight from other service company team members.
- You can pick the services or projects that benefit your business the most. Over time you can add the CFO’s services that provide the most bang for the buck in your small business. And you can delete any services that don’t fit your needs.
You gain perspective. Utilizing a part-time CFO will allow you to gain an unbiased perspective into business operations or staffing issues.
What services do a part-time CFO provide?
So you’re leaning towards hiring a part-time CFO. What are some of the responsibilities the position can fulfill? See what all a virtual CFO service could offer you below.
Act as a company liaison
A part-time CFO can coordinate with bankers, attorneys, vendors, insurance agents, accountant CPAs, if needed. They can provide assistance and advice in obtaining financing from banks and assist with negotiations with other entities or groups such as investors or insurance companies.
Build a complete financial strategy
CFO services can include developing operating budgets, profitability and trend analysis, tax savings proposals and compliance, incorporating cost controls, cash management and financial projections. They can also assist in the development of long-range strategic business plans and goals.
Provide market projections and analysis
As your business grows, so will the need for strategic services such as analyzing potential services, products and market trends.
Beef up the accounting department
An outsourced CFO can help develop company accounting procedures, controls and policies. They can provide oversight of finance and accounting staff as well as coordinate and oversee audits and auditors. They can also train, coach or mentor accounting staff if needed.
“But I have an accounting department!”
A small business’s existing accounting department or comptroller most likely doesn’t operate at the level of a CFO. Those staff members focus on the day-to-day bookkeeping and accounting services operations. In most cases, they don’t have the skills, knowledge or experience to strategize about the business’s future and make long-range financial plans. Take a look at our guide to CRO services for small businesses for more.
The time is right for a part-time CFO
Forbes notes that companies shouldn’t wait until they’re ready to go public to hire CFO services. CFOs can bring a great deal of value to the business by setting up a well-rounded and agile finance function. Whether you're having financial reporting difficulties, seeing untapped growth potential, or experiencing a big change or challenge in your business, right now is the time to act.
So, if your existing team of accountants or CPA doesn’t have the knowledge or ability to create the financial framework your small business needs, it makes sound financial sense to hire that type of expertise.
And for the maximum return on investment, if you don’t need a full-time CFO, only pay for the services you need.
Ascension CPA provides the solution
Ascension CPA provides experienced part-time CFO services for a fraction of the cost of hiring a full-time CFO. We’ve worked within a wide range of industries with numerous businesses. Ascension CPA works hard to ensure you have the financial information and guidance needed to focus on your passion — your business.
Request a consultation to see how Ascension can provide the financial expertise to make your business grow larger and run smoother.