Is it time to hire a CFO or Controller?

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Look beyond day-to-day financial management.

Many business owners reach a point where managing the financial side of their enterprise becomes overwhelming. This is usually a good thing; the company has grown to a point where simple bookkeeping and basic financial reporting no longer suffice.

If your business has similarly expanded past its capacity, it may be time to add a chief financial officer (CFO) or controller – on either a full-time or part-time basis. Before taking the leap to hire, consider whether your payroll can take on this high-paying position as a full-time employee, or if hiring a part-time CFO consultant is a better fit. Read more to understand exactly what services you are paying for and what makes the most business sense for your company.

The broad role

The role of a CFO or controller is to look beyond day-to-day financial management to more holistic, big-picture planning of financial and operational goals. CFOs take a seat at the executive table and serve as a higher level of support for all matters related to the company’s finances and operations.

CFOs go far beyond merely compiling financial data. They interpret the data to determine how financial decisions will impact all areas of your business. These individuals can plan capital acquisition strategies, so your company has access to financing, as needed, to meet working capital and operating expenses.

In addition, a CFO or controller will serve as the primary liaison between your company and its bank to ensure your financial statements meet requirements should you require help negotiating any loans. Analyzing possible merger, acquisition and other expansion opportunities also falls within a CFO’s or controller’s purview.

Specific responsibilities

A CFO or controller typically has a set of core responsibilities that link to the financial oversight of your operation. This includes making sure there are adequate internal controls to help safeguard the business from internal fraud and embezzlement.

The hire also should be able to implement improved cash management practices that will boost cash flow and improve budgeting/cash forecasting. They should be able to perform ratio analysis and compare the financial performance of your business to benchmarks established by similar-size companies in the same geographic area. A controller or CFO should analyze the tax and cash flow implications of different capital acquisition strategies — for example, leasing vs. buying equipment and real estate.

Major commitment

Make no mistake, hiring a full-time CFO or controller represents a major commitment in both duration of the hiring process and dollars to your payroll. These financial executives typically command substantially high salaries and attractive benefits packages. Another option is to outsource this role to a part-time or fractional CFO consultant who provides business advisory services for a set amount of time. Starting with a part-time CFO may help you assess your current processes and internal controls, then help your company to transition to a full-time CFO position down the road.

Regardless of the route you choose, contact your trusted advisor to help you assess the financial impact of the idea.

SKR+CO Expert
Ben Sportel
Business Advisory Services Director
Since 2002, Ben has worked extensively in process improvement, change management, staff development, finance modeling, supply chain operations, profit & loss management and inter-departmental team initiatives. In addition to his breadth of experience in financial operations, Ben is known as an effective communicator with both internal and external stakeholders.