Should a Small Business Hire a CFO or Not?

February 04, 2016 By Administrator

If you are wondering whether or not your small business should hire a CFO, you’re not alone. A lot of small businesses struggle with this decision. They don’t necessarily have the capital to hire a full-time CFO (chief financial officer), but their company requires financial management services beyond that which an accountant can provide.

For many small businesses, a part-time CFO is the best way to get the CFO services you need without having to pay a six-figure executive salary. Read on to learn the answers to some common questions about part-time CFO services.

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What is a Part Time CFO or Outsourced CFO?

Also called an “outsourced CFO,” a part-time CFO manages the CFO needs for more than one business. This means they don’t work for you full time. In many cases, small businesses do not require a full-time CFO, nor do they have the budget to pay for one. In these cases, a part-time CFO is a happy medium whereby you pay for the services you need and nothing else.

Some other common terms for part-time CFO include “virtual CFO,” “shared CFO” and “contract CFO.”

 

What Type of Small Businesses Need a Part-Time CFO?

Businesses in all sectors can use part-time CFO services. While this is a great solution for small startups, larger, more mature businesses often outsource their CFO work as well.

Even if your business already has a dedicated accountant that handles your financial matters, you could benefit from an outsourced CFO. In fact, many businesses with a full-time CFO still also use a CPA. A virtual CFO will be able to work with any of your existing staff, including your business accountant.

What Does a Part-Time CFO Do?

As discussed in our blog post Hiring a Part-Time CFO: What You Need to Know, a part-time CFO handles issues such as cash flow management, helping with business expansion, updating financial processes for growing businesses and analyzing your financial data to help you make effective business decisions.

Specifically, a part-time CFO can perform the following tasks:

  • Calculate the cost-effectiveness of a potential investment, such as hiring a new employee or launching an advertising campaign
  • Prepare your business for due diligence
  • Make financial forecasts for your cash flow and profitability

A part-time CFO gives you flexibility. You can hire them for short-term situations or for a long-term working relationship.

 

Where Can I Learn More About Small Business CFO Services?

Here are some resources to help you learn more about whether you should hire a CFO for your small business:

NY Times: When Should a Small Business Hire a Chief Financial Officer?

Blog Post: What Are the Benefits of Outsourcing CFO Services?

Cook Martin Poulson, P.C.: Outsourced CFO Services


Conclusion

For more information about the part-time small business CFO services we provide at Cook Martin Poulson, please contact us and we’ll be happy to tell you more and answer any questions you may have.

5 Questions to Ask to Determine if You Need a CFO

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