By Mckenna Gustafson, blog writer at TOP CFOS
A full-time CFO can be expensive. With benefits, salary, and other costs, a full-time CFO can cost a company up to $200,000 per year. Most young and small businesses cannot afford to pay a CFO this much, so many businesses are jumping on board with the trend to hire a part-time CFO. An outsourced CFO provides the business the exact same benefits of a full-time CFO for a fraction of the cost.
When is the right time for your business to hire an outsourced CFO?
Here are four signs to look for.
- You are currently struggling with the accounting. If you don’t have the right number or the numbers are wrong, it is impossible to be in control. It’s like putting a blindfold on and trying to fly an airplane. The job of the CFO is to constantly be in the know about the finances. If you find that you are having a hard time keeping the books neat, correct, and up to date, it’s probably time to think about outsourcing that job. Your outsourced CFO can also give you ideas about saving money.
- Personal spending and business spending start to overlap. Business owners sometimes see their business revenues as personal cash reserves. It can be tempting to take out of the business revenues for personal needs. This practice of “borrowing” often leads to small business failure, heartache, and very difficult tax issues. Don’t spend income and funds on personal needs. Ever. A part-time CFO can help clear up the lines between which should be personal funds and which are for the business.
- Finances are being neglected. In order for a business to truly succeed, finances should come first. Knowing exactly how much money is coming and going from the company is the only way to make it succeed.
- You want to approach investors for funding. Having a financial officer that can meet with potential investors and go over the numbers with them in detail can help you get more funding. A CFO will give you more credibility and will be able to break down the deals for you and advise you on the best one for your growing business.
If you can see any of these signs in your business, it is probably time to think about hiring a part-time or full-time CFO. The New York Times recommends hiring a CFO as soon as possible. The value that a CFO provides your business will more than pay for the fee of the services.
Also, check out our latest podcast episode where Roger Andrus, owner and founder of TechX discusses how to accelerate your business’s revenue.