Does My Small Business needs a Controller or a CFO?

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Does My Small Business Need A Controller or a CFO?

As a founder of a small business, you might be evaluating how to handle your finances? Common questions that one has to answer and decide upon are whether your business needs a financial controller or a CFO or both? There are many reasons you might be evaluating the need for a controller, a CFO, or even both.

These reasons may be:

  • Seeking new funding
  • Facing a cash crisis
  • May need assistance in deciding which financial parameters matter the most and why you might need them

Before taking the decision, one needs to know who precisely a financial controller and a CFO is and also understanding what their role is:

According to ACCA Global, a Financial Controller is The financial controller (FC) is a pivotal and senior role within an accounting function. Typically reporting to a finance director or chief financial officer, the financial controller is responsible for ensuring that the accounting operations of an organization run smoothly.”

According to Wikipedia, a CFO is “The chief financial officer is an officer of a company that has primary responsibility for managing the company’s finances, including financial planning, management of financial risks, record-keeping, and financial reporting. In some sectors, the CFO is also responsible for analysis of data.

On evaluating the definitions, one can make out that the definitions overlap. But, to give you more insights, here are the reasons as to why and when a small business might need a controller and a CFO.

Reasons Why Small Businesses Need A Financial Controller

  • Supervision of Book-keeping Services since some small businesses might not have a CFO, and the owner would be handling a lot of tasks, it is challenging to monitor book-keeping.
  • Preventing Errors and Fraud since a book-keeper might not have enough training or skills to handle internal control.
  • Accuracy of Financial Reports since sometimes book-keepers might not handle complicated or advanced issues, thus complicating financial reports’ accuracy. In some instances, the complexity of financial handling grows as the businesses grow, thus hampering the accuracy.

Reasons Why Small Businesses Need A CFO

  • Provide Guidance to the Financial Team since the owner often might not have enough financial knowledge to take advanced decisions such as pricing, budgeting, long-term projections. The best answer here is the hiring of a CFO who can handle critical financial decisions.
  • Represent Your Small Business while dealing with third-party people outside the company, such as banks, insurance companies, other financial institutions, VCs, and more.
  • Focus on Big-Picture Aspects instead of day-to-day book-keeping and minor financial handlings such as expansion, strategic planning, auditing, and such.

Choose Wisely: Find the Middle Way Out

For a small business, hiring both a Controller or a CFO or both is probably not a wise decision since both are high-paying decisions. It would also be difficult and unusual to find someone who can do both the Controller and CFO’s cap. Smaller businesses should consider the middle way out and seek an outsourced controller or an outsourced CFO, whichever perfectly suits your requirements. This would lead to having a good layer of separation of duties between internal and external functions, while also saving your cost.

This is where we, Smart Business Consultants, come in. Our goal is to provide you with a dedicated bookkeeper or a CFO controller who would assist you with all the end-to-end financial activities of the company, budgeting, forecasting, pricing, management reporting and more. This would enable you to concentrate on critical activities. For more details regarding outsourcing your book-keeping services and outsourcing accounting services, we at Smart Business Consultants are happy to help you!

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