When is it Time to Hire a CFO?
As your company grows, it’s always a good idea to take a look at the progress that has been made, where the company stands today, and where you’d like it to be in the future. When you consider future growth goals, think about what the company needs to get there. It may be time to hire a CFO who can define the strategic direction of the company and help drive success.
|What You Need To Know About Hiring a CFO
Q: How do I know when it’s time to hire a CFO?
A: I’m glad to hear business is taking off to the point that you realize you need someone you can trust to handle the money side of the operation. Let me start my answer by explaining exactly what a chief financial officer does, as compared to a bookkeeper or controller.
Bookkeepers are responsible for recording all company transactions: orders, invoices, purchases, bills, checks and payments. They perform various processes and procedures to make sure that what they enter is complete and accurate.
A controller creates timely and accurate financial statements–such as balance sheets, statements of profit and loss and cash-flow statements–based on the transactions entered for each accounting period. The controller is a trained accountant with formal education and sometimes certifications. It’s his or her job to make sure the accounting department is on top of entries and that statements adhere to Generally Accepted Accounting Principles.
A CFO looks at the bigger picture. This executive makes sure that the systems, processes and people are in place to produce accurate financial information (reports, dashboards, key performance indicators, etc.) so that the owner of the company can make better decisions. Put simply, a controller looks at the past, while a CFO looks to the future to help figure out how to reach the company’s goals. At the same time, a CFO is responsible for minding daily cash flow.
But Do I Need One?
Now that you know what a CFO does, ask yourself the following questions:
If you answered yes to any of these, you should consider bringing in a CFO.
How Do I Go About Hiring One?
If your company has less than $25 million in annual revenue, you could likely make do with a solid full-time controller and a CFO who provides services on an as-needed basis. If you have more than $25 million in annual revenue, you may need a full-time CFO, depending on the complexity of the financial systems used in your field and the challenges of the business. If you’re bringing in more than roughly $75 million, you definitely need a full-time CFO–there’s no way you can stay on top of financial matters at a business that size without one.
A full-time, qualified CFO with years of experience can command an annual compensation package of $250,000 or more, depending on location. Therefore, it’s the type of hire that may require the services of an executive search firm. For a less-than-full-time CFO, you can turn to the internet or work through your network of trusted advisors, such as your banker, attorneys or CPA.
However you proceed, finding a CFO you can trust is a wonderful thing. You can delegate a lion’s share of the financial headaches to this person and know that he or she has your back. And that, my friends, will let you sleep soundly for the first time in years.
It’s Time To Hire A CFO
A CFO is a critical leader in any growing organization. For this reason, you’ll want to do your due diligence and ensure you hire the right person. Clarity Executive Search can help you identify the skills you need in a CFO, define an ideal candidate and assess all qualified candidates using our proprietary hiring technology.
Learn more about hiring a CFO and our executive search process.
Clarity is a recruitment agency specializing in the placement of designated Accountants and Finance professionals in the GTA and Vancouver. Our mission is to improve decision-making in hiring by investing in behavioural science and hiring technology. We specialize in Project & Interim Resourcing, Permanent Search and Executive Search and recruit Finance and Accounting Executives for growth companies. We are a tenured team of successful recruiters who have worked in the major industries across Toronto and Vancouver. email@example.com.
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