Business owners handle their own bookkeeping for many reasons; among them, keeping costs lean and information confidential. While valid concerns for small or start-up operations this becomes impractical as the business grows.
Most business owners discover that hiring professionals generate cost – value benefits while freeing the owners to concentrate on the core business issues, the things that made them successful in the first place. These benefits include:
1. Finding cost savings
2. Saving money of taxes
3. Managing paperwork
4. Handling payroll and payroll reporting.
5. Avoiding fines and penalties for not filing proper documents or reports on a timely basis.
6. Forgetting to pay bills or invoice customers.
7. Generating accurate financial statements to provide creditors and bankers
Deciding on what type of staff you need is a complex decision. Your needs will change over time, and as your business grows you’ll cycle through several of these positions.
Bookkeeper
A bookkeeper will record transactions and usually do not participate in setting business strategy. A talented bookkeeper can provide you with options, keep you records and reports current and accurate. Their primary job is to keep track of the business and financial transactions and produce reports. Bookkeepers are transactional focused.
When to hire a bookkeeper
1. When paperwork begins to compromise your time management, job satisfaction or efficiency
2. Your business experiences rapid growth in a short time
3. Bankers and creditors need accurate financial information for loans
4. You are spending more time doing the books then generating sales or new business
5. You plan to expand
6. You plan to buy or sell equipment
Hiring a bookkeeper can be outsourced to a professional accounting firm who have bookkeepers on staff and can perform the function at a fraction of the cost of hiring a full-time bookkeeper. This is a good move especially if you are not sure of what you need done or cannot find a suitable applicant.
Controller
Controllers supervise the accounting staff and report to a CFO or the business owner. A controller is the company’s chief accounting officer and is responsible for preparing financial statements, budgets, taxes, and compliance with business regulations.
When to hire a controller:
1. When you need to provide financial reports on a regular basis to banks, creditors or shareholders.
2. You have the need to design financial policies and procedures
3. There is the need to design internal controls to protect company assets
4. There is a desire to prepare and monitor budgets.
5. Owners need advice on markets and trends
6. Business needs help in being proactive on tax strategies
7. Choices need to be made on software
8. Need to monitor receivables and pursue collections and grant credit to customers to improve cash flows
9. There is a need to monitor spending and payment of invoices.
Most small companies cannot afford a full-time controller but can afford a part-time controller or outsource the function to a consultant or accounting firm. Controllers are tactical focused.
Chief Financial Officer
Chief financial officers (CFO’s) assess the costs of doing business and the risks and threats that exist. CFO’s work with key officers, owners and directors and play critical roles in oversight, regulatory compliance, important company initiatives such as research and development and marketing.
When to hire a CFO:
1. There is a need to guide a company through a merger, acquisition, or change in business structure or operation.
2. To manage business expansion into new markets
3. Managing assets and financial relationships with multiple stakeholders
4. Streamlining operations
5. Assessing and managing financial risks
6. Planning short and long-term financial goals
7. Plan investment of corporate assets
8. Interpret financial indicators and business trends
CFO’s are more strategically focused. While a good CFO demands a large salary and sometimes ownership interest in the company, this position can be contracted to an individual or an accounting firm.
At Maxwell & Associates, we can help you with any or all these functions on a contract basis at the fraction of the cost of hiring a full-time employee. We have the expertise and systems to meet your needs and allow you to spend more time on doing the things that made you successful.
Feel free to contact me at craig@maxwellcpa.com, visit our website at www.maxwellcpa.com or call me 870.364.8992