If you're wondering whether your business needs a bookkeeping service, it probably does. If you're wondering whether it needs a chief financial officer (CFO), that answer is a little more complicated.
Even the smallest of small businesses needs professional bookkeeping. There are simply too many ways you can get yourself in trouble, either with cash flow or with the IRS, if you don't follow the proper protocols. And while you can certainly learn to do it yourself, chances are you'll be too busy with other aspects of running the business to risk spreading yourself too thin and perhaps making a critical error.
What Is a CFO?
The first thing you need to know about CFOs is what their job is. Unlike a bookkeeper, a CFO generally doesn't get involved with day-to-day record keeping. It is the CFO's job, however, to ensure the company's financial records are complete and accurate. These numbers are the foundation of your company's future. They must be solid.
With a thorough understanding of your company's financial history, a CFO then recommends an approach that will best plan for how to fund your business and optimally deploy your assets. This could include devising a new investment strategy, budget and financial forecast. A good CFO will also use this information to help determine the best form of structuring and funding for your business that may include different forms of equity or debt.
There are no hard-and-fast revenue benchmarks that determine when you need a CFO. And while highly-skilled CFOs are highly compensated, they might be more affordable than you think and available on a part-time basis.
So Again: Do You Need a Bookkeeper or a CFO?
If you started out keeping your own books with QuickBooks but simply no longer have time to keep up with the inputs, then, yes, it's probably time to bring in a professional bookkeeping service. And if you've been trying to keep your own books without QuickBooks or similar software, then it's definitely time to bring in a professional bookkeeping service.
As for a CFO: If your company's growth is simply a matter of increased scale, you might not need one. However, if you have ambitious plans for your company's growth but lack the financial acumen to make them happen, then a CFO could spell the difference between success and failure.
In many ways, a CFO is like a GPS for your company. If you know where you want to go but don't know how to financially get there, he or she will give you direction. And once you've got one, you'll realize how valuable a CFO can be.