A business without a budget is like a car without gas—it can’t go anywhere. Without an operating budget, your company will have a hard time starting up, staying afloat, and growing. But what does that mean? Well, it means that you need to know how much money you have available in order to finance expansion and other projects. It means that you need to know where your money is going in order to make sure that it goes to the right places. And it also means that you need a financial expert on board, so your business doesn’t end up overleveraged or underfunded at any given time. In this article, we will discuss the signs that might indicate why you should hire a CFO or a controller instead of leaving things as they are.
1) You Have an Excessive Dependence on Your Accountant: A common misconception among startup entrepreneurs is that their accountant is there to oversee all financial matters. You now understand that controllers are responsible for managing and supervising the company’s books. You’re asking your accountant to do the job of a controller if you expect them to advise you on how to set up your bookkeeping and accounting system, department, processes, and procedures, as well as verify that these are all effective and well-managed.
2) The Success of Your Company Is Growing: When a company expands (whether, through the addition of new sites, partners, marketplaces, or product offerings), it needs an accountant or bookkeeper who can oversee the financial aspects of the operation as a whole. When it comes to preventing deception and streamlining operations across numerous places and divisions, controllers are invaluable partners. Having this level of control ensures that your business’s back office is operating in accordance with regulations and producing precise financial statements that you can count on.
3) Your CFO is overworked: The chief financial officer’s principal function is to formulate the company’s long-term investment plan. The chief financial officer’s responsibilities include determining the company’s capital expenditures, investments, and strategies for attracting new stakeholders. The CFO’s operational responsibilities will suffer if he or she is forced to devote excess time to administrative tasks such as supervising the bookkeeper, communicating effectively with the accountant, or monitoring the company’s bookkeeping.
4) You’re worried about following the rules: A financial controller’s role includes managing and supervising the company’s finances to make sure they follow all applicable laws and procedures. A controller’s job is to check the books and make sure everything is in order from the inside. In the absence of such monitoring, you run the risk of having to pay fines, having your business’s credibility damaged for failing to comply, or even worse. When conducting audits, a controller will coordinate extensively with external auditors and your external accountant to make the experience as efficient and pleasant as possible for everyone involved.
5) The Accuracy or Timing of Your Financial Reports Is Constantly Questionable: If you want to operate your company like clockwork and generate the sorts of data-driven judgments that will contribute to your accomplishment, you need access to timely, reliable fiscal data. A financial controller may help you organize and systematize your financial reporting so that you always have the most recent financial information at your fingertips.
6) You Could Be a Victim of Fraud: You probably aren’t the only one helping out behind the scenes, assuming you’re a very new startup. However honest your staff may be, if you don’t have a controller who has set up solid back-office systems, your business is wide open to deception. Unless appropriate IT security mechanisms are in place, your financial department is at not only risk of fraudulent activity but also potential attacks. An accomplished controller can help you set up safeguards against both internal and external fraud.
7) Manual techniques squander both time and resources: Manual procedures in the bookkeeping and accounting department (such as tracking and categorizing spending, filing documents, creating bills and payment notifications, and creating financial reports) waste time and money. As an added bonus, mechanization helps ensure that financial statistics are both reliable and delivered promptly by minimizing the impact of gross negligence.
8) There has been a decline or stagnation in profitability: If your company is losing money and you don’t know why a Chief Financial Officer (CFO) may be a good investment. If sales are holding steady or growing, this becomes much more important. A chief financial officer (CFO) can help you figure out why your business is losing money. Your chief financial officer (CFO) can look over your outstanding accounts, accrued liabilities, and working capital and give you advice based on what they find. Follow their advice to restore your company’s competitiveness and prepare it for future expansion.
9) You’ve Moved Into a Different Industry: A Chief Financial Officer’s role is commonly thought of in relation to money, although their knowledge and experience extend much beyond that. Furthermore, CFOs excel in spotting possibilities in the market and forecasting future trends based on data. A Chief Financial Officer can be invaluable in ensuring the success of any business extension, if and how it be the introduction of a new operation, product, or market segment. A company’s CFO is the best person to advise management on whether or not to expand into untapped markets.
10) A Takeover or Merger Is In The Works For Your Company: Intricacies arise in the process of merging two companies. A chief financial officer (CFO) is an invaluable asset for any small business that is being bought or that seeks to acquire another company. Before, during, and after the merger is finalized, your chief financial officer will ensure the accuracy of all financial statements. They might look over the other company’s financial records to help ensure the takeover is worthwhile. A chief financial officer for a small corporation can ease your burden and make this shift less fraught with difficulty.
You should think about the advantages of having recourse to part-time CFO Services in Abu Dhabi if you’re not keen on the concept of hiring a full-time one. When these CFO duties need to be handled, outsourcing is a terrific option because it allows you to make use of the services offered without breaking the bank. Costly and inefficient manual processes waste time and resources.