Learning Center View all courses >
I believe that the core considerations should be to best address the needs of the company while minimizing spend. How many hours are required of a CFO-level resource, vs how many hours are required to complete lower level tasks? A good CFO or Controller will hold the company's cash preservation as a top priority and should identify opportunities to bring in lower cost resources to do as much of the time-intensive lower level tasks as possible, minimizing your time demands and cost for higher-level resources. So working with a responsible higher-level resource on a part time basis can yield more value while saving you time and expense.
Let's draw a parallel between business accounting and sports for a minute. The bookkeeper is like the score keeper--recording numbers in the appropriate boxes for reporting and (for others to perform) statistical analysis. Often a bookkeeper won't have a deep understanding of accounting, they'll just know how to keep score. But accounting professionals with more technical experience and expertise can add incremental value to the bookkeeper role. The controller is like the referee--they should have a deep understand of accounting rules and are responsible for the systems and processes that manage the company's financial data. Controllers ensure the accuracy and efficiency of a company's financial operations and reporting. The CFO is like the special teams coach, leading the strategy on technical plays and partnering with other coaches to lead the team to success. CFO's will also negotiate strategic partnerships with other teams (businesses) and service providers, participate in key staff recruiting process, help manage and raise capital, etc.
Speaking of teams, fulfilling the accounting and finance responsibilities of a business should be a team-based approach. Accounting and financial reporting can be very technical work in which mistakes can be costly to the business, so it pays to have systems of checks and balances and a second set of eyes to review the work to help ensure accuracy and consistency. It is difficult for one person to cover all this by themselves, especially when the work volume is unpredictable or is scaling up quickly.
Besides, each role requires a different skill set and personality type. Many CFO's can perform some or all of the lower level functions, but why would you want to pay their higher price to do lower level work? And if a "CFO" is charging a Controller's rate and/or is happy to perform lower level tasks for an extended period of time, are they really CFO material or are they a lower-level resource who's trying to wear the CFO title? How do they justify charging the company a high rate for their time to perform recurring tasks that a lower level resource can/should do for less money?
Many of my start up clients in LA use CFO/Finance for hire companies, like Full Stack Finance, Accretive, Supporting Strategies, Straight Line. They cover the gamut of financial modeling, planning, forecasting, as well as working on financing rounds and exits. But they also do day to day accounting operations, bookkeeping, taxes, etc. These people are extremely experienced. At least in the case of these 4 firms, they have run into about every stumbling block, idiosyncrasy, exception to the rule, obstacle and crisis, and have successfully mediated it. As a result, you don’t have to suffer the same pain other startups with less experienced finance/accounting staff might have to endure. And typically, the cost out the door is less than if you fork out the funds for a full time experienced CFO or Controller. If know the founders of these four firms - any/all would be happy to have a discussion with you about your situation and will be straight up about if they think you should outsource or hire in house. Just message me if you want their info.