The Importance of a Chief Financial Officer in Business
The need for a chief financial officer (CFO) is often overlooked, especially by new companies, because of the lack of understanding about the job. Generally, a CFO is in charge of 1) interpreting and preparing a company’s financial statements, 2) developing finance strategies in the company’s dealings with banks and investors, 3) planning tax payments, 4) formulating internal controls to minimize fraud, 5) preparing the company’s budget and 6) handling financial compliance. With the importance of these tasks, it’s hard to believe that there are companies without a CFO in their employ.
Although the previously mentioned tasks are vital to business operations, it’s quite common for founders to give them less priority and focus instead on finding new customers and improving their products and services. However, for a company to grow, it needs to have a sturdy foundation, which is what a good CFO can provide. With today’s erratically fluttering business market, the role of a CFO may prove to be more important than ever.
If you’re a small business owner, there are telltale signs that your company badly needs a CFO. You should begin the selection process for a CFO immediately if: 1) The company’s revenues are experiencing an exponential growth, 2) The company has acquired venture capital, and 3) There are more than 30 workers currently employed.
When selecting a CFO, you should keep in mind that hiring a highly qualified CFO can take as long as six months and could potentially demand a basic salary around $150,000 to $250,000 a month. The salary may be seriously expensive, but having a CFO take care of your company’s financial requirements can ensure a potentially problem-free and longstanding business venture for you.
If hiring permanent CFO services is truly impossible, one option for you is to hire a part-time CFO. Look for one with a solid background, preferably a former CFO from another company. Part-time CFOs are usually required to work for two days a week, but may render additional hours depending on your company’s requirements.
A part time CFO can help you with planning and executing financial systems and even contribute to your long-term business strategies. A part-time CFO can work for a new company that has limited resources.
If you feel that your company could use the services of a CFO for hire, go online and look for companies that provide CFO services. If you have a network of fellow company owners, you can ask for referrals.
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