While there is no set timeline for growth for any business, there are key benchmarks a business owner can look to in order to know when it is time to take the next step.
1. Bookkeeper
Every business needs a bookkeeper in order to keep accurate financial records for decision making and paying taxes, regardless if its revenue is $100 dollars or $100 million dollars. At first, the business owner is likely to handle all bookkeeping duties. Some entrepreneurs are more apt than others in the field of finance, so the point at which an entrepreneur outsources or hires a bookkeeper differs from business to business.
2. CPA Firm
Once your business gains some traction, you may find yourself falling behind on bookkeeping and accounting matters while dealing with other business interests. Even if you believe that your records are perfect, a CPA will likely be able to add additional value. In addition to bookkeeping, CPA’s offer payroll, advisory, tax, and other services. Whether you need a CPA firm to help you file taxes for the first time, or help you weigh decisions on how to grow a business, a CPA will make your decisions much clearer.
3. Full time CPA/Controller
A full-time staff CPA or Controller will working solely for you. Generally, your business will need to be generating a few hundred thousand dollars or more in revenue in order to afford adding a CPA to the team. A Controller’s primary responsibility is ensure the bookkeeping is being completed on time and properly in order to provide accurate data to analysts and executives. Salaries start at $65,000 for a recently licensed CPA with little experience, but with experience, commonly exceed $80,000 for a Controller who has passed the CPA exam.
4. Financial Analyst
A financial analyst will analyze the reports that a Controller or CPA produces and create reports for management. They will analyze trends, look for opportunities and weaknesses, and produce or assist with cash flow reports. A financial analyst will also look at past market trends along current day-to-day statistics to make recommendations on how to use company resources. Typically, a company’s revenue will be in excess of $1 million before hiring a full-time financial analyst to work along with a CPA or Controller. Many new companies have recently formed that allow you to outsource your Financial Planning & Analysis functions for much cheaper than a full-time analyst.
5. Director of Finance & Accounting
A Director of Finance & Accounting fills the role of tasks that a CFO would fill in a large-scale corporation but without the “Officer” designation. The Director of Finance may combine the roles of Senior Financial Analyst and CPA/Controller into one role. This director will allow other members of the company to focus on other aspects of business while the Director of Finance handles financial reports and meetings with the executive team. It’s important that the Director of Finance is in touch with other facets of the business. When hiring or promoting someone to Director of Finance or Accounting, make sure they are able to work with numbers on a daily basis while also seeing the bigger picture of growth for your company. The business state for hiring a Director of Finance & Accounting will fall into the same or slightly larger revenue range as a Financial Analyst.
6. Treasurer
A treasurer comes into play for your company whenever you’ve grown to the size of a larger than average small business. The Treasurer will typically report directly to the CFO or the Director of Finance. Their primary job is to manage the cash of the business, making sure enough is on hand at all times to pay obligations as well as minimizing borrowing costs of the company. They spend much of their time doing cash flow planning several months into the future and running various scenarios to anticipate cash levels depending on various market conditions and levels of business performance. Treasurers work with banks and creditors and sometimes work with ATM and armored car companies to ensure corporate and in-store liquidity. Before hiring a treasurer, the responsibilities of this role would be handled by an analyst or Finance Director.
7. CFO
If you’re in need of a CFO, you’ve officially grown your small business into a highly successful small business. A Chief Financial Officer will be the highest ranking financial manager in your company. They will be responsible for monitoring the financial performance of the business as well as taking a role in strategic future planning with the rest of the executive team. They will make recommendations about strategic investments in products or other companies, oversee the company’s investment portfolio, advise on best practices for limiting tax liability, and how to navigate federal regulations, and work with investors and lenders. They will directly supervise the Controller and the Treasurer. They must be able to communicate effectively and work hand-in-hand with your business’s CEO and COO.
Many businesses realize they need financial help, but aren’t exactly sure what kind of help they need or where to find it. If you’re wondering what your business needs are or whom you should hire to help with your financial management, consultant Scott Lacy is here to help and would be happy to speak with you. To get in touch with Scott, send our office an email at sbdc@uark.edu or call 479-575-5148.