In today’s world, outsourced or part time CFOs are all the rage. Believe me, I too offer that service. We CFOs sell you on cost reduction, efficiency, CPA services, Big 4 background, strategic planning, etc.
Here is what we do not tell you.
Most outsourced CFOs are Controllers at best. Most of us have no desire to enter debits and credits or create spreadsheets. Most of us have no experience in companies with revenue over $150 million, have never worked for a public company, and our experience is generally limited to a few industries. Frankly, unless your revenue is over $150 million, a CFO – whether part-time or full-time – is not necessary.
My recommendation is to employ the three team member approach to handle all of your accounting and finance needs:
· Accounts Receivable: Hire one junior person with two years of experience dealing with customers and QuickBooks Enterprise. This person will need to handle customer calls, schedule jobs, and invoice clients. You should be able to pay this person anywhere from $15 to $25 an hour. Annual cost is anywhere from $31,200 to $52,000.
· Accounts Payable: Hire one person a bit more senior, with three to five years of experience dealing with all things liabilities and Quick Books Enterprise. This person will need to handle accounts payable and vendor issues, all other liabilities, and serve as your accounts receivable back up. You should be able to pay this person anywhere from $20 to $30 an hour. Annual cost is $41,600 to $62,400.
· Outsourced Controller: Hire a CPA with auditing AND industry AND strong Excel experience. As an ex-auditor myself, I can tell you that auditors learn the big picture, completeness, and accuracy skills that are not always learned doing everyday accounting functions. This person will manage the team, review your general ledger for accuracy, reconcile bank/credit cards/loan accounts, process and manage both payroll and sales taxes, manage inventory and fixed assets, complete your monthly financials, complete necessary management reports (i.e. cash flash, sales profitability reports, etc.) and provide details to variances in reporting. You should be able to hire a qualified Controller anywhere between $80,000 to $140,000.
Most often, a CFO is not up to speed on your business and is too far removed from the day-to-day operations. With a strong accounting team in place, your Controller will be able to provide you with all the information you need as the owner of your kingdom to make educated decisions and to grow the bottom line. Because again, no one knows your business like you do.
NexGen provides outsourced accounting support and finance analysis in Dallas/Fort Worth. Our clients range from the start-up stage to mid-sized to seasoned businesses. NexGen professionals can act as your entire accounting team, or let us work in tandem with your accounting and finance professionals. Either way, we work with you to grow your company and help you make sound business decisions.
