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Originally Posted On: https://www.srqtax.com/financial-oversight-5-signs-your-small-business-should-hire-a-virtual-cfo/

 

Congratulations! The fact that you’re considering hiring a chief financial officer (or CFO) for your company probably means you have grown. It’s time to stop being the one-woman or one-man show and build a team you can trust.

If you’re grappling with the fact that you just don’t have the funds available to add a full-time, in-house CFO to your staff right now, you don’t need to worry. There is a better solution to getting help with your business’ financial oversight.

Many small businesses don’t need a full-time CFO. The best option for numerous small businesses and start-ups is to outsource virtual CFO services.

Are you struggling with whether or not you need to hire a CFO? While there is no concrete answer, here are five signs that might mean it’s time to outsource CFO services.

1. Rapid Business Growth and Financial Oversight Concerns

Is your company experiencing rapid growth? As you continue to grow, it is no longer possible for you to do it all. Especially during times of fast growth, it takes too much time to manage the day-to-day, and financial planning and oversight are often overlooked.

Don’t wait until you’re spread too thin to hire your right-hand person, a chief financial officer. When you’re too busy, it’s easy to fall behind on reports and financial tracking. Hire a CFO before you get to this point.

If you aren’t ready to have a full-time CFO on staff, outsourcing CFO services might be an excellent option for you to consider for your business. Virtual CFO services are available at an affordable fixed rate. These qualified professionals can provide you with the support you need without having to take on another full-time staff member.

Many companies that offer CFO services offer a variety of packages that are priced to meet many different budgets. Believe it or not, outsourced CFO rates are incredibly reasonable. In most cases, outsourcing a CFO is not an expense.

If you hire a good CFO, it should add at least 1-2 percent of net income. This amount should more than cover the cost of the CFO services.

An added bonus to outsourcing a CFO is you often get access to other affordable services that can save you time, like payroll or accounts payable services.

2. Acquisitions and Mergers

Is your business preparing for an acquisition or a merger? This is an indicator that you are in need of a CFO to help you through this time. When your financials can be trusted, the value of your company will always increase.

The best CFOs are ready to help you lead your company through mergers, acquisitions, and any other significant changes in your business’ structure. They can analyze contracts, attend meetings as a financial expert, and help answer difficult questions.

They are skilled in making complex decisions utilizing the best financial practices. A chief financial officer will also help you discover any major risks or threats that your business could potentially face in this complicated arena.

3. Complex Financials

Are your financial statements getting increasingly complicated? Even if you have a background in accounting, the complexity of a growing business can become overwhelming.

You will eventually get to the point where you need a CFO’s insight so you can continue to grow, and answer those difficult questions you will inevitably face. The bigger you get, your board of directors will start asking more intricate questions, and you need to be prepared to answer them.

Whether your board is asking you to validate a financial decision you made or asking you to analyze the pros and cons of an opportunity you want to take, having a CFO there to provide you with financial knowledge is a crucial asset.

You don’t need a full-time CFO to provide these important services. Outsourced or virtual CFOs can perform these duties as well.

4. Eliminate Auditing Stress

Are you experiencing stress over your business’ audits? If you’re at the point where your bank is requiring audited financial statements, and you don’t specialize in finance, this can become overwhelming.

An experienced CFO can oversee your audits when the time comes. In preparation for upcoming audits, CFOs can also create internal controls and implement systems that will make auditing processes much easier going forward.

There is no need to allow your audit to take you away from your daily business operations. If you can hire a virtual CFO to handle your business’ financial oversight, it’s always a smart move to make.

5. Your Investors Are Asking for More Information

One of the most important reasons to hire a CFO is if your investors are asking for more information that you’re struggling to provide.

Investors who are deciding whether or not they want to invest in your company sometimes ask for a lot. They may be asking to review your internal financial controls or asking for reports that you don’t have the time or skills to create.

A skilled CFO can prepare all the reports you need to be able to meet investors’ expectations and requests. Investor relations is a major part of the roles and responsibilities of being a CFO. A skilled CFO will know what potential investors want to see.

Hire a Virtual CFO Today

As a small business owner, are you ready to stop focusing so much on your financial statements and start concentrating on everyday core business activities? Bringing a new person onto your team to handle financial oversight can pay out big in the long run.

What are you waiting for? Don’t hesitate to contact us with any questions or concerns. We would love to provide your business with the financial support it needs to continue to thrive.