Job titles often are a matter of semantics in a small company. When there’s work to be done and just a few people to do it, a person’s title might not encompass the position’s actual duties. This holds true in finance. Deciding when to bring on someone specifically to handle finances is a difficult choice, and when you do make the hire, what job title do you give them?
In all but the smallest companies, hiring a controller is a good bet. A controller is a company’s operational accounting expert and will be the go-to person for anything related to daily finances. Someone needs to pay the bills and people around there, right?
A chief financial officer is another option. The CFO operates as a companion to the CEO, overseeing the long-term financials and serving as a strategic partner. According to The Brenner Group, a Cupertino, California-based finance and accounting firm for technology companies, a CFO can help a company avoid mistakes in raising capital, optimize cash management, avoid group think, and build credibility with the board of directors and potential investors.
A hands-on CFO in a small company will handle tasks that are normally the charge of a controller. In a midsize or large company, a CFO will handle long-term and big-picture items, and the controller will handle day-to-day business. A common situation you’ll find at small companies is someone who functions as both the bookkeeper and the CFO.
Another option for small companies is to hire an interim or part-time CFO or controller who can provide senior-level advice without breaking the startup bank. For those not quite ready to hire a controller or a CFO, some incubators, including Orange Studios in Redmond and extraSlice Smart Space in Bellevue, offer clients access to financial services. Many Eastside financial firms have teams that focus on small businesses and startups, so don’t wait until revenues reach $100 million before getting your finances in order.
HIRING A FINANCE HEAD
1. Sooner is better than later: Don’t wait until sales are through the roof, the books are a mess, and you’re ready to price out an IPO. That’s way too late. Getting a finance-minded person on board early can help you hire the right team and plan for those big, long-term financial moves.
2. It’s OK to start small: A controller or part-time CFO is better than no financial leadership at all. If the salary of a full-time CFO is out of your price range, bring your dreams back down to Earth and get yourself a consultant to help figure out the best bang for your buck.