Are you a small business owner and your growing company doesn’t have a CFO yet? This post shares a few insights into when you might consider bringing an executive onboard to focus on your financials.

Maybe you have a strong handle on the company’s financials.  Maybe you have some part-time or fractional CFO help.  Maybe you don’t think the company is big enough or complex enough yet.  For whatever reason, you haven’t pulled the trigger on hiring a CFO yet. 

Here are some of the signs that you should consider hiring someone sooner rather than later:

People are telling you to hire a CFO

I’m not talking about someone looking for a job here, I’m talking about advisors, investors and other executives.  If people are repeatedly suggesting that you should hire a CFO, it may be a good idea to start a search.  Investors may require this as part of an investment.  Others may make their suggestions more subtly, but if you keep hearing it from people (who wouldn’t be a candidate for the job), that’s probably a sign.

If you are spending too much time on financials

If someone else (CEO/President) is spending more than 30% of their time on financials, it is probably time.  Diverting focus away from the operations of the business can detract from the company’s potential in incalculable ways.  Improved operations and focus could “pay for” the CFO’s cost many times over.

If your list of financial related projects keeps growing

If you keep a list of financial projects, and the list continues to get longer, that is probably a sign.  If there are critical or high-priority items on that list, that is even more of a reason to hire a CFO. If you don’t keep a list of financial projects, that might also be a sign that a CFO is needed.

If you don’t enjoy the work

Let’s face it, working with numbers isn’t for everyone.  If you don’t enjoy managing the financials of the business, and you have the ability to bring on a CFO, it will make having that person much more meaningful to you.

If your business is growing in scale or complexity fast

If you are in hyper-growth mode, it’s almost never too early to bring on a CFO.  The CFO can be a vital component to creating a stable environment while a company grows fast.  The CFO would be the point person on planning and analysis for growth, but can lead teams for office expansion, creating new subsidiaries, hiring process and other aspects of growth.

What a CFO can bring to the table

  • Trusted Partner: A good CFO will be a trusted partner for you to bounce ideas off of.
  • Analysis: In most small businesses, a CFO would lead up important recurring and ad-hoc analysis projects, which will help the company make informed decisions based on timely and accurate data
  • Legal assistance: Assuming you don’t have in-house counsel, a CFO can be the point person for contract reviews and other legal activities, which might reduce outside legal fees and streamline some areas of your business
  • Company organization: Keeping organized is part of a CFO’s job, and that will rub off on other areas of the business.
  • Strategy: A CFO can be involved in the strategic direction of the business.  The CFO can look across the whole organization and propose ideas to help generate greater shareholder value in new or different ways.
  • Leverage technology: A CFO can make your accounting and finance team more efficient and effective by bringing in new technologies (like AP genie) and focusing on process improvement. 

In summary, there are many reasons to hire a CFO and many benefits that your company might get from hiring a CFO.  Above all else, do your diligence on the candidate and make sure you are compatible, since you will be working closely with this person on key issues.