In today’s episode, I am speaking about when it is the right time to take on a CFO, a chief financial officer, also known as an FD, a financial director. So let’s dive in. If you’ve been around the online business space for any time, I’m sure you will have heard the phrase, if you don’t have an assistant, you are one. And the same is true of a CFO, FD, numbers person. If you don’t have someone all over the numbers in your business, then that person needs to be, and is, you. We all know that thousands of businesses fail every single year due to running out of cash and that is not just start-ups.
Hundreds of well-established businesses run out of cash too because they don’t have anyone in this role. The business owner is too busy to do it. Their bookkeeper or accountant hasn’t been tasked with it, and is not being managed to do it, and this is not the type of thing that typically many accountants or bookkeepers would generally do as standard. When I speak about someone being all over the numbers, what I mean is that at least weekly they’re reviewing sales and expenses against budget, they are preparing and reviewing forecasts, they’re examining financial dashboards and matrix against plan. There is much more to it than just reconciling the bank and entering your data into QuickBooks or Xero. That can be a really scary thing for many business owners who perhaps find it much more comfortable to bury their head in the sand when it comes to their finances and data, and maybe that’s you. Or maybe you’re okay with looking at the finances and data, but there’s just not enough hours in the day for you to do it justice and really get the learnings you need from it.
If you are either of these people, if you’re in either of these positions, then in all honesty it is the right time for you to get a CFO, FD, numbers person, whatever you want to call it, into your business. Now this doesn’t need to be a 200K a year full-time hire, which is what a full-time FD or CFO with a decent experience would cost you. This can be an accountant stepping into that role for you, and it’s a role that we fulfil for the majority of our clients. But many accountants are not commercially strategic enough to do this role properly either, so you need to assess if yours is, if you are considering using your current accountant to step up.
Now when you get to a revenue of upwards of 500K a year, it becomes an absolute necessity that someone other than you is all over the numbers, someone who has the background and professional expertise in finance and accounting. Now even with a CFO in place, you still need to know the numbers yourself. You cannot absolve yourself of all responsibility. You are the CEO after all. But you can hand over a lot of the day-to-day management of that kind of thing. You still need regular check-ins with your CFO and can expect things to be highlighted to you when targets are not being met. Absolving yourself of responsibility of the money side of the business however, as a business owner, is not acceptable. I have seen business owners fall into this trap and I promise you it does not end well.
Thank you so much for listening. Until next time, let’s find the clarity in your numbers, increase your wealth and get more money in your pocket.