I was asked last week to explain the value of a CFO to a young entrepreneur who had started from scratch with a great idea, and built a pretty solid business before hitting the glass ceiling (no, not that one) where the financial infrastructure he had in place just could not support his continued growth. Margins were suffering and the reasons were unclear. Financial reports were clearly inaccurate and delivered way too late and too basic for meaningful analysis. His business advisor sent him to us to explore upgrading his financial team (which consisted of a couple of internal clerks and the bookkeeping department of his local CPA firm. I told him there are three pillars of business finance that every company needs to have in place, and he had none of them, in part because his bookkeeping team was built mainly to be as low cost as possible while still being able to file tax returns. So, for your consideration, here are those three pillars that every financial department must master to be effective:
That’s why we’re in business.
We are Your CFO for Rent.