Do you really need a CFO for your small business?

cfo

As modern times have developed, so has the facet of the business. Now there are multi-level aspects with each needing an in-depth scrutinization and analytical working to get the company to reach its full potential. As business needs a certain kind of requirement of every aspect, the aspect of a Chief Financial Officer (CFO) is very interdisciplinary. The CFO of a company is not a person who handles only the financial requirements of the company but is also a person who contemplates and advises the owner to take a suitable course of action which pertain to many areas of developing the business.

There are certain roles that a CFO plays in the business as the owner of a small business cannot be present nor handle each and everything themselves. CFO has the potentiality to restructure the business and can push the business in taking the right path.

Accounting duties:

The bottom line work of a CFO is that of a financial controller and taking decisions based on the financial position of the business. They keep their eye on the bottom line and channel the required funds and advice on using them and if there is a deficit of funds they devise a plan in a way which benefits the company, as well as the client’s satisfaction, is achieved.  They ensure smooth facilitation between the financiers and the company if there are any disagreements.

Technical reports of the position of business:

As the CFO is the technical head in the accounting area of the business he /she has the responsibility of maintaining or overseeing the books of accounts and ensuring that there is no discrepancy in the books of accounts. But this cannot be done by you because as a  small business owner you would have to oversee the whole business and ensure its smooth running or you may lack the skills which are needed for this aspect, no one knows it all or we cannot exist in different dimensions , it was always better to seek out help .CFO ‘S also ensure the business is compliant with all the required tax provisions and business operating criteria and is stays updated on the same.

Analyzing every aspect of the business:

This is something, not all business owners but a person who has experience in the dynamics of business and has the required experience of supporting a business or a startup can do this very easily and can support the business growth. Basically, as a business owner cannot say no to everyone as he/she might be obligated to do it but a CFO can play hardball and stand firm in the decision which benefits the business.

A key player in the merger or acquisition of the company:

The CFO plays a very important role of an advisor during a merger or an acquisition as he/ she are able to analyze the weakness and the strengths of both companies during a merger or acquisition and is able to advise the entrepreneur whether to go through with it or not. If they are then what should be done to adapt to the changes that will happen within the company and its financial position.

Internet age compliant:

As the internet has evolved so has the bookkeeping ways of and as a small business e are quite dependent on technology and not all small business owners are proficient on the technology front, this is where the CFO comes to the rescue of a small business owner by introducing automated software and by making the business more economical and profitable for the entrepreneur.

Remote relationship builder:

As a small business on is obligated to have a better standing relationship and an in earning a good name in the market in respect of their business. The CFO can facilitate and foster a respectable and cordial relationship between the bankers or potential clients and can introduce one to better prospects. As the CFO is a person who has expertise in the field of accounting and other strategic decision making the financial lenders favor the opinion of the CFO thereby making it easy for the business owner to secure loans and advance the business.

Managing cash flow:

As most of the small business is in not experienced in the issues of cash flow or the idea of managing  and having  a positive cash flow it is better to appoint  a CFO as they are experienced and can find a solution to critical questions such as;

  • Is the cash flow enough for the workings of the business?
  • Is the cash flow is in a profitable position?
  • Are the existing invoicing systems enough for the current state of the business?
  • Is there is any overdue or incomplete accounting procedures to be completed?
  • Would the financial position of the company be better improved if there is an additional flow of funds?
  • Is the company ready for expanding or does it have to restrict its current operations due to the cash crunch?

You don’t need to be omniscient:

If you have capable CFO then there is no need for you to run corner to corner for all the operations of your company.  The CFO will perform as an accounting controller, a relationship facilitator and as a strategic advisor to you thus enabling you to have a successful business and earn a good standing in the market.

In conclusion, one could say that having a CFO is an all in all the best move for your business, but the decision of hiring a CFO should not be taken in haste as the size of your business, your financial position, tax compliance, the capital acquisition and other concerning factors should be also considered. But the advent of modern technology has paved way for having a virtual CFO and enjoying the benefits that a physical CFO could provide to the business and its growth.

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