What does CFO stand for and what does a CFO do? These are common questions among business owners, and understanding them on a deeper level may be impactful for your business. In this article, we will dive deep into a CFO’s role and how your small business may benefit from the insight they can provide.
What is a CFO and What Do They Do?
CFO stands for Chief Financial Officer and represents the highest-ranked finance professional within a company. Ultimately, the CFO is there to help your business succeed. They are building a great accounting and finance team, ensuring that your books are lined up and balanced, vetting potential merger opportunities, and so much more. CFOs are also there to help you resolve any financial problems and help your business achieve its goals. Just as your CEO, or Chief Executive Officer, ensures the business is running like a well-oiled machine, the CFO does the same for the financials. They also provide critical insight into the financial wellbeing of the organization to help decisionmakers make better choices about the future of the company.
As you likely already know, the financial wellbeing of a company impacts more than just that, the financials. Maintaining financial health for a company is also critical to the business’ growth opportunities and longevity.
Does My Company Need A CFO?
You may be wondering, does my small business really need a CFO? Well, not in all cases. However, there are some key indicators within a company that can point to whether or not the business would benefit from the addition of a CFO. Here are some of the most common cases:
As previously mentioned, this is a shortlist of the top 5 indicators of the need of a CFO, but the list goes on. CFOs are a great tool to consider for a small business that is growing or constantly changing, but timing is everything. Bringing on a CFO too early could lead them to not have enough work but bringing them on too late could result in a financial crisis for the company. As in all cases, it will be important for you to consider the unique needs of your business and determine whether or not it makes sense to add a CFO to your leadership team. If you’re uncertain and don’t know where to start, contact our team today.
This article was written by Gabriella Hall. Gabriella is an Accounting Specialist I with Baldwin CPAs. For more information on the support Baldwin CPAs can provide you, contact gabriella.hall@baldwincpas.com.