5 Signs Your Business Needs a CFO

As a company grows, its financial needs and problems equally become more complicated. While most businesses usually rely on an accountant to help them with financial management, your business needs another professional, especially if you want to bring in high-quality expertise in financial leadership. That’s where a Chief Financial Officer (CFO) comes in. A CFO will allow you to focus on what you do best and set your business up for future success.

While every business has different accounting and financial needs, there are some apparent signs your company will benefit from a CFO. Here are a few signs your business needs a CFO.

> Lack of financial expertise

As an entrepreneur, it’s always wise to do what you do best in business and leave the rest to the experts. This is the best way to ensure overall efficiency in carrying out business functions. If you are not a financial expert, it’s time you consider hiring a CFO.

A CFO has the financial expertise to drive the business in the right direction. In addition, they have gained substantial experience working with other companies, so they are familiar with the financial strategies that work and those that don’t. Essentially, a CFO will establish strategies that work best for your business.

> Increased scalability

Rapid growth is an obvious sign that your business needs a CFO. A fast-growing business requires an extension of automated systems and more capital and financing. A CFO is fit to handle rapid revenue growth resulting from possibly increased complexity. They will interpret your investment and technology and the means of acquiring capital. For your company to grow more quickly, you will require interim CFO services, which will help you establish the best financial and tax strategies and formulate the future direction of your business.

> Low Profitability

If your business is driving revenue but running on low-profit margins, that could signify a defect within your cost structure, client base, or business plan. A CFO can give financial insights a business needs to maximize profit by increasing cash flow, minimizing costs, and changing strategies.

Most small businesses accept a new customer, but fail to understand how to estimate the costs associated with serving that customer. A CFO can ascertain the cost structure of each new part of business and, most importantly, what your company requires to change to make money on your work.

> Development of a new product or offering

With the highly competitive and rapidly changing business environment, the role of a CFO can go beyond finance. A CFO should be an expert in market trends and be able to use consumer-driven data to help identify new business opportunities, including the development of new products or offerings. In addition, unless the business owner is fully present throughout the development and launch process, a CFO can ensure the business has conducted thorough market research to support financial expectations.

> Delays in managing the books

Whether it’s you or a bookkeeper managing the books, you need to retrogress and see whether your time is being wisely spent. If you or your employees are forced to come at night or on weekends to handle simple bookkeeping tasks, that’s not an effective use of time. A CFO can assign duties and ensure that you use the latest accounting software to streamline your bookkeeping processes.

Endnote

Not every business needs a CFO, but your company may begin to show signs that it requires an executive role in the finance department as it grows and things change. Therefore, if your business has started exhibiting these signs, it’s time to bring in a CFO. A financial executive may be only what your company needs to achieve green economic success.