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    How to determine when to hire a CFO, Controller or Accountant

    Business owners often handle their own bookkeeping for many reasons that include fear of delegating sensitive financial information, wanting complete control and keeping staff costs lean. Those reasons, while undoubtedly valid for start-ups and smaller operations, grow increasingly impractical as your business grows. Some owners delegate accounting duties to trusted family members or staff, but the most successful and savvy entrepreneurs learn quickly that accounting and finances are the lifeblood of business and deserve professional management from skilled financial specialists.

    The three key financial positions in most businesses are Accountant, Controller and Chief Financial Officer or CFO.

    However, depending on the size of your business, your industry and other factors, you might need a part-time Accountant or require full financial staff that includes a controller and CFO. Deciding what financial team structure your business requires is a complicated decision that depends on many factors. Your needs will almost certainly change over time, and if your business grows successfully, you might cycle through all these positions.

    The following section detail what each professional does and explains when your business might need one or more of these financial specialists:

     

    Accountant responsibilities

    Most Accountants work reactively recording what has already been done financially in the company with little or no influence on business strategy. Accountants sometimes work on a transactional basis and seldom make decisions about future business transactions. A talented Accountant might explain your options, keep records and reports, identify discrepancies in the books and recommend cost-saving ideas, but their primary jobs are to chronicle the business and its financial transactions and compile reports from this information. Some of the company Accountant’s responsibilities include:

    • Recording sales, expenditures, accounts payable and accounts receivable
    • Monitoring costs of supplies, office expenses, rent, utilities and other fixed and variable costs
    • Managing payroll, withholding tax, and sales tax accounts
    • Preparing daily, weekly, monthly, quarterly and yearly reports for management, government agencies, employees and stakeholders
    • Researching alternative suppliers and making cost comparisons
    • Inventory management and at times HR related matters
    • Checking compliance issues

     

    Knowing When to Hire an Accountant

    Most business owners – especially those with an entrepreneurial spirit — thrive on running every aspect of their businesses, and accounting has become more accessible with all the intuitive software that’s available. It is entirely possible for business owners to keep the books, but it is not necessarily a good idea as the business grows. When paperwork begins to compromise your time management, job satisfaction or efficiency, it is time to consider hiring an Accountant. You might not need to hire a full-time employee and can even outsource all or part of the accounting work such as payroll. Hiring an Accountant makes sense if any of the following apply to you and your business:

    • You do not understand accounting but trust the software to tell you everything you need to know
    • You are not familiar with tax in general and tax minimisation strategies
    • Your business experiences rapid growth in a short time
    • Investors, lenders or shareholders want professionally prepared reports
    • You are spending more time doing the books than generating sales or new business
    • You plan to expand to a different region, industry or line of products
    • You want to buy, sell or trade assets
    • You have been informed that your books are going to be audited

     

    When to Consider Hiring a Controller

    Financial Controllers, who are sometimes called controllers, supervise Accountants, tax managers, credit managers and other accounting staff while reporting to the CFO, CEO or business owner directly. In smaller companies, a controller might be the only Certified Practicing Accountant in the company or supervise a team of accountants. Many of these professionals manage their duties with help from a clerk, Accountant or administrative assistant.

    A controller is the company’s chief accounting officer and bears responsibility for preparing financial statements, business plans, budgets, taxes, compliance certifications and special projects such as planning short and long-term business strategies, business acquisitions, sales of assets, company mergers and securing financing or investors. Considered a middle-level financial manager, controllers usually perform the following duties:

    • Manage financial staff
    • Sign checks and bear fiduciary responsibility for company operations.
    • Establish company fiscal policies and procedures
    • Create reports for internal review
    • Handle insurance and risk management policies
    • Protect company assets
    • Prepare, monitor and update budgets
    • Spearhead preparations for public offerings
    • Advise owners and executives on financial markets, trends and best practices
    • Develop proactive tax strategies
    • Choose and administer accounting software

     

    Signs that Indicate Your Business Needs a Controller

    The more significant your business grows, the more likely you will need more than just an Accountant. If you have shareholders or a board of directors that consists of people who are not friends, close associates and family that you appointed, hiring a controller is a sound business practice that protects your company and assets. In general, a Controller concentrates on accounting while a CFO focuses on strategic finance.

    As the company’s stakeholders expand, a controller provides tactical management reporting and staff supervision on accounting issues while the CFO handles financial planning and bears responsibility for the controller and accounting team. Most small companies cannot afford a full-time controller, but as the business grows, you cannot afford to operate without a controller even if he or she functions on a part-time or consulting basis.

    When to Hire a Chief Financial Officer

    CFOs work beyond strict limits by taking part in all business decisions and advocating for the best financial interests of the organisation. As any seasoned entrepreneur or business owner knows, stringent economic assessments are but one of a successful company’s business goals. Initiatives that yield strong profits could easily weaken the company with customers who do not like paying high prices for inferior products or loyal clients who place greater value on a company’s goals, principles, environmental commitment or operating techniques.

    The best CFO’s assess not only the costs of doing business but also the risks and threats that any enterprise might generate. As high-ranking corporate officers, CFOs work with owners, boards of directors, senior management and other key stakeholders and play critical roles in research and development, company oversight, regulatory compliance and day-to-day operations. Other CFO duties include:

    • Steering a company through mergers, acquisitions, public offerings and changes in business structure and operations
    • Managing major business expansions to new markets
    • Advocating for sound financial practices in complex decision-making
    • Managing assets and financial relationships with multiple stakeholders
    • Streamlining operations
    • Assessing and managing financial risks
    • Planning short- and long-term financial goals
    • Interpreting market data from various financial indicators and business trends
    • Understanding the reasons why business markets perform the way they do
    • Determining how to invest corporate assets
    • Forecasting market trends and how the company can capitalise on them

    Each part of the company relies heavily on its CFO’s combined responsibilities: controllership, treasury management, planning and forecasting on critical financial matters.

    Progressively More Demanding Financial Management Needs

    Small-to-medium-sized businesses have evolving needs for finance and accounting as their operations grow. Owners or designated team members often handle accounting for small and start-up businesses with the help of accounting software. Eventually, however, most enterprises determine that hiring professional finance staff – either full – or part-time or outsourced – frees staff for core business duties and fosters greater accuracy, better compliance and enhanced oversight.

    As your business grows and the demands on your time multiply, you might find that you need financial employees that are supervised by a controller or a CFO to manage the company’s increasingly sophisticated finances. Your options include hiring full-time, in-house staff or outsourcing to a virtual or part-time CFO who has the experience and skills needed to cover all aspects business and finance. Both options are equally valid ways of bolstering your business’s financial strength, but many small-to-medium sized companies enjoy the benefits of hiring advisers as needed to avoid the high costs of employing full-time professionals.

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