There is an old saying regarding financial leadership: “a good Controller will know your numbers, but a good CFO will know your business.” You should determine what skills are needed for your business and how much. This article will help you answer these questions for your business.
First, think of what kind of help you need. Do you need someone to keep your accounting accurate and up-to-date? Do you need someone to help manage your banker? Do you need a right-hand person who can “what if” your strategic plan and assumptions? Do you need this person full-time or part-time?
A good Controller can keep your accounting accurate and timely. A more seasoned person can add analytical metrics and trend analysis to help you in managing business performance. The Controller will not likely be seasoned enough to help you with strategic planning or leading financial discipline with your management team.
A good CFO will understand your business, support the metrics analysis and key performance indicators to keep your management team focused on what matters. They will also be seasoned in managing staff and strategic thinking. Keeping your banker up-to-date will also be well-managed by this person.
Ask yourself what the issues are that need more expertise in our management team. If your team just needs more information quickly and your issues are more about daily company performance, then a Controller with analytical skills may be your answer. If you need more leadership and strategic focus, most Controllers have not yet built up those skills.
As you think through your needs, it may be that strategy and financial modelling skills are needed to improve company performance. You may need leadership in holding your management team accountable to get company financial results that you want. In this case, you likely need a seasoned CFO that can help you “what if” and hold your team to their planned results.
What you can afford comes into question for most middle market companies. It is the second question after determining what skills are needed. Well-qualified people are in high demand these days and do not come cheaply. However, there are options in today’s freelance economy. Both Controllers and CFOs are available on a fractional basis as well as full-time hires.
So, determining how much of the desired skills needed is next. If it appears that there are enough reoccurring duties that will keep a skilled person busy for 30 hours per week, then a full-time hire is likely. If less than that, then part-time is your most cost-effective approach. You will pay a higher hourly rate for a skilled part-timer, but overall cost is less.
If this process seems too complex for your immediate attention, don’t put it off. Just call us and we can help you figure out your needs. We do this analysis all the time and we may be able to help you at no cost.