How to Know It’s Time to Hire a CFO

May 26, 2021 By Bella Paul

You’d be surprised at how many business owners think they can get by with an accountant running the financials. All you need is to ensure data accuracy, and then you’ll know exactly where to go from there, right? Not necessarily. Put simply, you can’t reap the benefits of true business growth without enlisting a strategic financial professional—also known as a CFO. Why? A CFO is a core business driver and the key to managing your cash. But how do you know when it’s time to hire a CFO?

What is a CFO responsible for?

A CFO does what a controller and accountant do not—drive strategic decisions from financial information. Although responsible for owning the entire finance function, a CFO doesn’t just look forward and backwards with business financials—they also look laterally. They must be aware of all the components of a business and plan a strategy according to the needs and capabilities of those components. A CFO utilizes a host of different financial elements to leverage existing resources. The primary roles of a CFO include the following:

  • Cash management
  • Strategic analysis
  • Profitability analysis
  • Mergers & acquisition support
  • Long-term forecasting
  • Scenario modeling

Does your business need a CFO?

At one point you might have asked yourself, “Am I ready to take on a CFO?” If you’ve experienced any of the following, you might be ready.

You need someone to manage your current financial team

You can’t oversee your accountant forever. While accountants and controllers might need direction in terms of providing the right data, a CFO knows exactly what you need to know and how to get it to you. Communication isn’t always a strong suit for accountants, which can prove detrimental to your relationship with them if you want the “what will this mean?” of the financials.

A CFO closely oversees the performance of the rest of the finance team, both supervising overall data accuracy and pulling out the most meaningful and actionable information for you to understand the “so what?” of the data.

You’re growing rapidly and want to scale properly

You’re well aware that business growth doesn’t just happen overnight. You need to pace yourself, and you need help determining how fast to run this race. A CFO is your key through all of this. In any long-term or short-term thinking and strategizing for growth, a CFO builds a bridge between your strategy and your financial performance.

Without anyone to provide that connecting link, you won’t know how your financial performance is contributing to your strategy. If raising capital is on the radar for you, a CFO provides the strategy and expertise needed for you to avoid blanking on some of the financial questions thrown at you during investor pitches.

You want financial scenarios for potential business decisions

Accountants do what they’re paid to do. If you’re not paying them to engage in management meetings to review financials, then you shouldn’t expect them to provide the insights that go alongside this involvement. If you find that you’re frustrated by a feeling of wanting more, then it’s time. A CFO specializes in taking the outcomes of various scenario models and feeding them into your business strategy; furthermore, a CFO also works with both long-term and short-term forecasting that is designed to drive today’s decision calls.

Hiring a strategic CFO will truly take you to the next level of business performance and can bring you dividends in the long run. You’ll find that they are the business partner you needed to challenge your assumptions and push you to see from a different perspective. If you’re wondering whether it’s time to hire a CFO, consider taking on a part-time CFO. Amplēo’s part-time strategic financial consultants are ready to take your current resources and build out the right plan of action for you.

Are you ready to make finance

a competitive advantage?