How to Know It’s Time to Hire a CFO

There was a time when a chief financial officer was responsible for little more than overseeing a company’s accounting functions and reporting financial data to the other C-level executives. Today, a CFO is more likely to be more involved in shaping the company’s strategy for future growth, focusing on the big picture rather than the minute details and serving as a partner to the company’s owner or CEO. Although the CFO’s job may still involve risk mitigation, cash flow analysis, regulatory compliance and the accuracy of financial statements; modern CFOs may also play a critical role in managing financial volatilities, planning for business growth or securing new markets.

If you are the CEO of an international corporation with billions of dollars in sales annually, you probably already have a CFO. However, if your’s is a new, small and growing company, you might be wondering how to know if or when it is time to add a CFO to your staff. Although there is no magic formula you can use to determine whether it’s time to hire a CFO, your answers to the following questions can provide you with the insight you need.

Six Questions To Help You Know If It’s Time to Hire a CFO

  1. How complex is your business? If you have a single production facility that produces just a handful of different products for a few dozen clients, your financial management issues should be relatively easy to navigate. However, if you have clients in far-flung locations, produce hundreds of different products or own multiple production facilities, your finances are much more complex. As a rule, the more complex your operation is, the more likely you are to need a CFO.
  2. What is your pattern of business growth? Whether you are growing at an incredible speed or experiencing a rapid downward turn, you may need a CFO to assist you with a financial landscape that seems to be changing by the minute. On the other hand, if you have a stable, steady business that provides revenue of roughly the same amount every year, your financial picture is easier to understand. Unless you want to expand your business, you may be able to get by without a CFO for a bit longer.
  3. Do you have timely access to accurate financial data? Many times, you can encounter opportunities or challenges that require you to make fast decisions. If your financial data is inaccurate or inaccessible, you could make the wrong decision. If you have encountered this issue more than once, you need a CFO.
  4. What are your plans for the company? If you are planning to take your company public, acquire or merge with another company, secure venture capital, sell your business or undertake a formal financial audit, a CFO can be invaluable.
  5. How are you spending your time? If you are having to devote a lot of your time to financial management, you may be unable to spend the time you need to cultivate new business, develop new products or recruit top talent.
  6. How accurate are your cash flow projections? If you keep finding yourself short of funds to meet necessary expenses or are surprised by the amount of money resting in accounts that pay no interest, you might benefit from the services of a CFO.

A CFO can provide you with many different advantages. You can increase the accuracy of your financial data, have assistance in planning future growth and perhaps even sleep better at night once you have a financial expert on whom you can rely. If you are experiencing rapid changes, expanding into new markets or you simply lack the time to focus on your core duties, it may be time to hire a CFO. If you would like to learn more about how a CFO can help you, please contact me at (901) 277-6165 or complete the contact form on my website.


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