|
The CFO is the chief financial officer
of your company. The question is: Do you really need one? The answer:
Maybe.
Financial professionals come with various
levels of expertise, education and certification, and they demand
various amounts of compensation. Their titles vary from bookkeeper,
junior and senior accountant and accounting supervisor or manager
to controller and CFO. Education and certifications include associate
degree in business, B.S. in accounting or finance, certified management
accountant (CMA) and certified public accountant (CPA). Wages and
salaries can begin at a few dollars an hour for a professional at
the early stages and rise to more than $150,000 per year plus benefits
for an experienced CFO.
Following is a suggested road map for
each stage of business growth and the requisite financial professional.
. Stage 1: Founding of company. Find a competent CFO or controller
to assist in setting up and organizing the books, selecting accounting
software and establishing the processes and principles of financial
operation. Don't hire the individual; instead, leverage their expertise
by retaining them as a consultant or adviser. A few stock options
might keep this professional available for periodic advice while
your firm is growing.
. Stage 2: Proof of concept/market introduction. Sales are minimal,
so maintaining control of costs is critical. A part-time bookkeeper
will be sufficient.
. Stage 3: Early growth. Now is the time to hire a full-time bookkeeper
or accountant if your growth is fast-paced. Your role as CEO is
to make sure that the employee is following the guidelines set up
earlier by the CFO. Periodic reviews of accounting functions and
financial statements by the CFO who helped during Stage 1 will be
helpful in this formative period.
. Stage 4: Growth. For some companies, when the number of employees
approaches 50 or sales exceed $1 million, a controller may be needed.
This individual is trained to not only maintain the books, but also
to protect company assets. It may be time to begin independent year-end
audits and an upgrade of your accounting system. Your outside auditor
will be expecting someone with the capability of a controller within
your firm.
. Stage 5: Market expansion. Sales are a few million dollars, employees
number 100-plus and a liquidation event (IPO, merger, etc.) is a
possibility. It is time to hire a CFO, a professional who accounts
for historical transactions, but more importantly, helps shape future
financial decisions.
|