When a growing business needs a CFO, and when it does not
Five signals that a growing business needs the thinking of a CFO, and what a fractional CFO does in the first weeks.
By Lois Margolin, CPA
Most owner-led businesses do not need a full-time chief financial officer. Many do need the thinking of one for a few hours a month, especially while they grow faster than their systems.
Five signals
- Cash surprises you, in either direction.
- Prices were set once and never revisited against real costs.
- A bank, landlord or partner asks for projections and nobody on the team can produce them.
- You are growing without a budget, so hiring and spending decisions are made by feel.
- Partners read different numbers and meetings turn into arguments about which one is right.
When you do not need one yet
If your books are not closed every month, start there. A CFO works from reliable numbers; without them, the projections are guesses with decimals.
What a fractional CFO does first
- Reviews the last twelve months of statements and cleans up what distorts them.
- Builds an annual budget and a twelve-month cash projection.
- Sets a monthly meeting to compare plan against actual and decide what to change.
A budget is not a prediction. It is the decision you make in advance about what matters.
This article is general information, not tax, legal or accounting advice for your situation. For advice on your business, book a call with Lois.
