Small businesses don't always remain the size at which they began, unless they have a weak financial plan. That's pretty much the point of advertising and drawing more customers – to gain more revenue and popularity, until there's a steady flow of income that allows companies to consider expansion and new markets.
At what point, though, is it wise for owners to put someone else in charge of the money? Selecting a chief financial officer (CFO) is a big deal for many reasons, and not just because that person will be overseeing the business banking.
What they doUnlike a bookkeeper, a CFO will need to do more than just keep track of all ingoing and outgoing funds, though this will be a substantial job duty assigned to that person. Entrepreneur Magazine states that a CFO will perform his own governance checks, review figures of his and previous work, and ostensibly regularly audit the books to ensure everything is in compliance. CFOs also prepare tax documents, monitor other financial employees like controllers and manage various facets of the corporation's money flow such as invoices and online banking for accuracy.
A CFO, writes Inc Magazine, should also have some jurisdiction over human resources and IT departments, as these resources may need different money management tactics to improve their performances. Better software and talent means HR will need an allocation of funds, but it also requires networking with technology personnel to ensure they can handle the addition of these programs.
When to get oneSo when does a small business warrant hiring a CFO? Bloomberg notes a number of conditions that could result in this decision being made, but there are other internal qualifiers unique to each company that may trigger this reaction. A few good rules of thumb, though, include having more than 30 people working at the corporation or growing by one-third each year for at least two years. Maintaining these levels indicates a trend rather than a fluke, and consistency in revenue and employment figures are a sure sign that it's time to get someone on the money matters to keep the financial plan on course. The source noted that it is possible to hire a CFO in a part-time capacity, either as an individual or outside firm, but it's up to the specific entity whether it wants someone in-house checking business banking all the time, or just someone to verify the books before tax season.