The success of an enterprise depends on crucial financial decisions at a given time. As a business owner or CEO, you might find it challenging to decide whether to bring in an expert financial executive who can lead the accounting and finance team, helping you make better decisions. The financial executive who oversees all economic activities and monetary aspects of a company is referred to as a CFO, or Chief Financial Officer. The CFO acts as an adviser to the company and the Chief Executive Officer. The right time to hire these financial experts may vary and depends on other fundamentals, such as your revenue, budget, staffed members, accounting team, and their expertise. But if you are reading this article, chances are that the right time is almost here.

So, if you’re moving forward with your decision, hire someone who has years of market experience and knowledge. You can consult an outsourced CPA in Richardson, TX, for this.

Finance and Accounting for Business: 

When starting a business, most people don’t start with an accounting or finance team. What they don’t understand is that it doesn’t matter whether you are bootstrapped or have gone with an investment—financing is the threshold of your revenue. In the early days, you can take care of all the taxes, accounting, and financing duties, but as your business and team grow, the rules change. You need to maintain compliance with standard rules and regulations, including accounting principles. Thus, it becomes increasingly important to bring in a dedicated and skilled person to manage the function. This includes:

1. Fundraising: Raising capital is quite important for most startups, as without it, managing business operations and systems becomes difficult. A CFO would play a vital role in this process. They craft financial documents, help with investor pitches, and determine the right funding options for you.
2. Financial Planning and Analysis: Finance teams create reports that comprise cash flow statements, income statements, and balance sheets. They work diligently to formulate and execute effective strategies that align with the company’s objectives and goals. They are also responsible for allocating budgets, planning expenses, and forecasting revenue. The CFO or financial team makes use of the company’s historical data and yields insights from them to identify trends, areas of improvement, and necessary adjustments.
3. Cash Flow Management: Without managing your incoming and outgoing cash from the company’s account, one cannot plan ahead. For instance, if you don’t know where your money goes and comes from, you won’t have any control over the finances of your business. This implies that you may face financial risk and a shortage of money in case of an economic downturn or emergency. A CFO and the finance team are equipped with the knowledge to use the accumulated cash, credit, and debit wisely.

When to Consider Hiring a CFO & When’s the Right Time:

Here are some signs that indicate you should hire a fractional CFO:

1. Rapid Growth: If you are experiencing steady growth in your business in terms of revenue, staff, and overall work, then you must consider a CFO to oversee all the complex finance and accounting activities.
2. Funding: If your business is seeking an investor for funding or looking for an IPO, a CFO can come in handy. They will assist you in impressing the investors and securing funding.
3. Financial Challenges: If your business is facing heavy debt and cash flow issues, or you believe the company is operating without any financial expertise on hand, then hire a CFO. They will provide the essential monetary guidance to help you escape financial discrepancies and pitfalls.