Small business CEOs are filled with passion and brilliant ideas. With first-hand knowledge of their industry, they have the information they need to fuel innovative concepts and business moves. So, what’s the potential drawback to CEOs driving strategic financial decision-making alone? 

There’s a reason why the executive suite can grow to accommodate a dozen different positions. While not all of those positions are necessary for every business, especially smaller ones, it’s a rare CEO who can handle everything on his or her own. Successful CEOs recognize their weaknesses and find partners to strengthen them. One key business area that often requires strength from an additional partner is finance and accounting. 

CEOs bring a unique perspective to the table, but partnering with other specialized individuals enables them to execute their ideas effectively while maintaining balance throughout the company. In the realm of finance, that specialized individual should be a chief financial officer (CFO) — a professional who can provide the financial planning, reporting, record-keeping, and management that growing businesses desperately need. 

If you’re a CEO and you’ve been having trouble planning or executing ideas in a way that’s confident, cost-effective, and profitable in the long term, a CFO might be the missing piece of the puzzle that can help you pull things together and drive sustainable growth. 

How a CFO and CEO Make a Powerful Team

CEOs are skilled at evaluating business opportunities and thinking about how the risks and potential gains could impact business outcomes. However, they may not have enough time in their day or a specialized enough skill set to truly understand the financial risks and gains associated with those business opportunities.

To put it simply, a CEO looks at business impact, but a CFO steps in to look at the financial impact. As you can imagine, one without the other is a recipe for disaster. All CEOs recognize that staying within budget is essential, but that alone isn’t enough to properly evaluate opportunities and create a plan of action.

Together, a CEO and CFO make a powerful team in identifying and evaluating new growth opportunities. Collaboratively, CEOs and CFOs are prepared to make the best decisions that will effectively utilize company resources, align strategic outcomes, and drive growth and profitability. 

Benefits of Choosing the Right CFO

It’s apparent that CFOs and CEOs form a powerful team when they work together, but what exactly does a CFO bring to the table? In truth, a CFO’s impact will stretch beyond accounting and reporting, ultimately providing guidance in the areas of budgeting, taxation, operations, and more. CFOs:

• Improve decision-making capabilities by providing financial insight into product development, new market entry, strategic growth plans, and more.
• Forecast cash flow and evaluate the potential cost of business plans, helping to shield the business from major risk and loss.
• Evaluate and correct financial documents for accuracy and detail, supporting compliance and reporting measures.
• Cultivate relationships with vendors and suppliers, helping the business re-negotiate contracts and grow long-term.
• Propose solutions to address the company’s financial strengths and weaknesses over time, positioning them for sustaining success.

When it comes to the specific duties of a CFO, it ultimately depends on your business’s needs. These professionals are flexible with a wide-ranging skillset and many years of financial expertise. They may help you evaluate market readiness one day and guide you through multi-state tax complications the next. 

Should You Hire an Outsourced CFO?

Recognizing the need for a CFO is just one part of the equation. Even when CEOs acknowledge that something is missing in how they are managing business finances, it is crucial that they take the right approach to fill that gap. In many cases, bringing in a full-time CFO just isn’t feasible. Often, businesses are better off hiring an outsourced CFO.

Whether for budgetary reasons or to maintain business agility, an outsourced CFO offers the same top-tier advice that you’d expect from an in-house professional — but with much more flexibility. For instance, you can call on an outsourced CFO on an interim basis or begin a part-time or full-time contract that meets your needs.

The best part of outsourcing CFO duties is that you can choose from a larger talent pool with the potential to look outside of your city or even outside of your state to find the right fit. Whether you require specialized industry knowledge or regional experience, an outsourced CFO can offer all that and then some without growing your executive suite. 

Find the Best CFO to Partner With

Given that a CFO has such a significant role to play in evaluating opportunities, discussing strategic goals, and guiding your business’s growth, it’s essential that you partner with the right professional. You should seek out a CFO who is engaged, passionate, knowledgeable, and available to help your business when you need it, whether that’s on a contract, part-time, or full-time basis.

If you don’t know where to start your search, consider bringing on a trusted CPA as your financial officer. CPAs are particularly well-suited for becoming CFOs thanks to their extensive financial expertise combined with their integrity, discipline, and organization.

Are you looking for more information? Contact BradyRenner CPA for guidance in choosing the right CFO for your company.