Your initial instinct is that a CFO at a $200,000 per year salary isn’t relevant for your small business. And I would agree with you.
But before we stop there, let’s consider what a chief financial officer does, or their major responsibilities so we can understand what functions your small business might be lacking if we throw the towel in immediately on the concept of the CFO.
- Chief financial officers are responsible for accurate and timely financial reporting. Too many small business owners conclude that financial reporting is just for bankers and investors to know what’s going on in your company. That is the biggest mistake a CEO could make. The very first financial reports, profitability analysis, or cost breakdown should be for the business owners or decision makers! Critical decisions are made on this information, and it is a CFO’s duty to be sure that a CEO can make timely decisions on good financial information.
- Chief financial officers are responsible for the current financial situation of a company. In other words, they’re responsible to make sure that the business has enough money or cash on had to grow the business. They manage the fundraising to ensure a proper balance between debt and equity financing.
- Chief financial officers are responsible for forecasting and the strategic financial direction of the company. It is a main responsibility of a CFO to identify profitable areas the business should focus on, and which areas the company should wind down. They are responsible for forecasting these impacts on the business and are a critical part to the future success of the business.
In case you have any doubt at this point to the relevancy of a CFO role in your business, a small business absolutely needs the roles a CFO fulfills!
The key to understanding how a growing business or struggling business can afford this type of help is in understanding the accounting alternatives that a business has.
The short of the matter is that with an outsourced CFO solution like Preferred CFO, you can receive the benefits of having a CFO for the cost of a bookkeeper. The above functions can be thriving in your business for much less expense.