Clients often come in believing that there’s a financial threshold for requiring CFO services; however, the complexity and volume of transactions is a much better way to determine when it’s time for a CFO. External pressure from banks, regulators, or suppliers is another sign. Rapid growth also indicates a need for CFO services–the business will require the expansion or redesign of systems, as well as increased financing. a CFO needs to interpret the terms of acquiring capital.
When information is late or inaccurate, I recommend clients look into hiring a CFO or part-time CFO service to take care of cost control measures, capital acquisition, banking relationships and regulation. Bookkeepers can provide accurate processing of financial information for the CFO to interpret.
Finally, a business preparing for a merger or acquisition would do well to look into hiring a CFO or a part-time CFO service. A CFO can select a due-diligence team to evaluate a target acquisition, usually outsourcing this task. The CFO can interpret the report, helping customize the terms based on the due-diligence report’s conclusions. A CFO can feed a potential investor or lender, speeding up the process by anticipating investor concerns and having the relevant information ready to counter those concerns.
A CFO in a growth-oriented small business is critical to controlling growth and communicating results to owners, shareholders, banks, insurance companies, and employees. As part of a team, a CFO can help manage risk, interpret financials, and provide a useful set of skills.