5 Reasons Your Small Business Needs CFO Services

 

If you want to internally audit your accounting department, prepare for a capital raise, and scale your business proactively—then no matter what your financial goals are, your company could likely benefit from small business CFO services.

So what is a CFO, and what do they bring to the table for early stage companies?

Today, the experts at CFO Hub are breaking down five reasons why hiring a CFO may be a wise financial decision for your growing company.

 

What Is a CFO?

A Chief Financial Officer (CFO) is a senior staff member who manages every financial aspect of a company—from everyday operational spending to long-term financial goal-setting and beyond.

The CFO role looks a little different for every brand, but CFOs typically perform one or all of the following duties:

  • Oversight of financial operations, including:
  • Purchases
  • Accounts Payable (AP) management
  • Accounts Receivable (AR) oversight
  • Investments
  • Mergers and acquisitions
  • Payroll (PR)
  • Financial forecasting
  • Setting and planning to meet financial goals
  • Audit management, both:
  • Planning and executing internal audits
  • Liaising with external auditors
  • Cash management
  • Raising capital and managing investor relations

Essentially, CFOs are qualified to oversee, manage, or consult on all things financial. And not all CFOs are full-time, in-house employees—fractional, part-time, virtual, and as-needed CFOs are all viable options for companies seeking financial support.

 

5 Reasons to Hire a CFO

 

CFOs are seasoned, high-caliber professionals who can play as large or as limited a role in your business as needed. But, why should you consider hiring one? Let’s break down five reasons why small business CFO services might be a smart move as you scale.

 

#1 They Can Help Direct Financial Projects

 

If your business is running successfully—you have employees, a steady client base, and a degree of brand recognition—it may be time to allocate resources toward growth. But this will likely add unfamiliar or even intimidating items to your to-do list.

You may already know that a financial undertaking is on the horizon, but perhaps you are not sure where to start. A CFO can help you take on a project, like:

  • Integrating new accounting software
  • Recruiting accounting staff
  • Making legal changes related to:
  • Incorporation status
  • Business name
  • Ownership and stakeholders
  • Preparing for potential mergers and acquisitions
  • Supporting an audit (internal or external)

If you need advice for navigating uncharted financial waters, it may be time to retain a CFO.

 

#2 They Provide Financial Forecasting Expertise

 

Financial forecasting can help you predict how operational, staffing, or product changes will impact your business in the future.

While it might be simple enough to create a rudimentary if/then model in Excel, a CFO can provide significantly more valuable forecasting information.

They have immense talent and knowledge about:

  • Market factors, like:
  • Interest rates
  • Customer base buying power
  • Labor-related regulatory changes
  • Complex forecasting models (like linear regression)
  • Tax policies in your jurisdiction
  • Regulatory compliance
  • High-impact potential changes to the forecast, including:
  • Mergers and acquisitions
  • Capital campaigns
  • Potential financial emergencies

A CFO can offer multiple, nuanced perspectives on your brand’s financial future, but they also have the expertise to predict potential changes over the horizon.

 

#3 They Can Help Establish a Solid Financial Foundation

 

If your business is new to the market, you may still be establishing your foundation, financially speaking. If this is the case, taking advantage of small business CFO services can help you establish a stable financial footing in the early days of your brand by:

  • Implementing accounting software tools:
  • Choosing the right platform
  • Integrating it into your everyday operations
  • Training accounting staff to use it
  • Taking full advantage of its features
  • Creating and testing Standard Operating Procedures (SOPs) for accounting tasks
  • Automating financial transactions, like:
  • Loan and bill payments
  • Payroll
  • AP check runs
  • Regular investments
  • Transfers between operating, expense, and savings accounts
  • Establishing pay tiers and benefits packages for employees
  • Seeking, purchasing, and maintaining insurance policies

#4 They Can Connect You With Their Networks

 

CFOs are experienced executives with significant professional networks of their own. When you consult with a CFO, you can take advantage of their contact list, which likely includes:

  • Other executives in your industry (including those working at competing brands)
  • Employment candidates
  • Consultants
  • Potential investors
  • Regulatory agents

Major industry players are already liaising with the CFOs and other chief executives—rubbing elbows with them can help you outperform your competition and scale your brand.

#5 They Know How to Grow Burgeoning Brands

 

What will it take to make your business profitable? Attract investors? Make major investments in real estate, equipment, or personnel?

CFOs simply have the expertise to push your company across the rubicon.

Let’s explore a hypothetical. Imagine that you want to reach profitability in the next twelve months. A CFO can help you plan and execute:

  • Personnel changes or additions that will help you increase product or service outputs
  • Cost-cutting measures
  • Budgeting
  • Marketing and advertising campaigns to draw in new business
  • Capital raises
  • Branding changes that will bolster your market reputation

You might be thinking, “That sounds like a lot of expertise.” It is—the right CFO will have the acumen, experience, and instincts that make your goals a reality. While you will not find them drawing a new logo or posting hiring ads themselves, they know how to pay for the tasks that can skyrocket your brand.

Are You Ready to Hire a CFO?

 

CFOs are critical players in business growth—but, can you afford to hire a CFO? Before you post a job ad, ask yourself the following questions:

  • Are there significant roadblocks in the way of my brand’s progress?
  • Do I have the financial expertise to manage my company finances on my own?
  • Do I really know what my finances will look like in the next six, twelve, or twenty-four months?

Depending on your answers to the above, it may be time to begin budgeting for a CFO position.

But the CFO role is changing—if you simply cannot support a full-time, potentially six-figure hire at this current juncture, you have other options for securing high-quality financial services from a powerhouse CFO.

Consider the following alternatives to a full-time, in-house CFO:

  • A CFO on retainer for as-needed support
  • A per-project CFO who can take on your occasional major tasks
  • A fractional, virtual, outsourced, or consulting CFO

CFO Hub: Customizable, Scalable Financial Services

 

CFOs have the power to transform your brand. And when you need high-octane accounting experts, turn to CFO Hub.

From CFO services to back-office support and financial staffing, our full slate of services can easily scale as your business grows or your needs change. Whether you want to start with a part-time CFO or outsource your accounting from top to bottom, we provide finance as a service for every role at every stage of your company’s growth.

 

CFO Hub: Customizable, Scalable Financial Services

CFOs have the power to transform your brand. And when you need high-octane accounting experts, turn to CFO Hub.

From CFO services to back-office support and financial staffing, our full slate of services can easily scale as your business grows or your needs change. Whether you want to start with a part-time CFO or outsource your accounting from top to bottom, we provide finance as a service for every role at every stage of your company’s growth.

Related:  5 Reasons Your Business May Need an Interim CFO