What Finance Role Do I Need in My Business?
We get it. As a business owner, SME scaler, entrepreneur… you’re wearing a lot of hats. You know you need to outsource and you’re aware your finances are a bit all over the place. But how do you know what role to hire? Who does your business need?
The likelihood is, you’re reading this blog because you’re thinking exactly that. And this is the best place to start - defining your business needs is the first step to finding the perfect finance expert for your business.
The array of titles—CFO, fractional CFO, finance manager, financial controller—can be confusing. In this blog, we'll demystify these roles and guide you towards identifying the right finance expert for your business.
It can be hard to decipher the exact finance role you need for your business, with a range of tasks falling under many responsibilities.
Understanding the finance roles
Before we delve into which role might suit your business best, let's understand what each finance professional does.
What does a Chief Financial Officer do?
A Chief Financial Officer (CFO) oversees the financial strategy of your company. This includes not just accounting, but also financial planning, risk management, data analysis, and forecasting. They're typically involved in high-level decisions and play a crucial role in shaping the company's financial future.
So what is a fractional CFO?
A fractional CFO offers the same strategic oversight as a full-time CFO but works on a part-time basis or project basis. This can be an ideal solution for SMEs that need strategic financial guidance but aren't ready for a full-time commitment or investment.
What is a Finance Manager?
A finance manager handles day-to-day financial operations, budget management, and financial reporting. They ensure that your financial practices are sound and that you're on track to meet your short-term financial goals. You can also find a fractional finance manager.
What is a Financial Controller?
A financial controller oversees your accounting functions. They're responsible for ensuring the accuracy of your financial statements, managing your accounting team, and making sure that your company complies with tax laws and regulations. You can also find a fractional financial controller.
5 things to consider when hiring a new finance role
Deciding on the right finance professional for your business is a critical decision that can significantly influence your company's trajectory. The choice between a full-time CFO, a fractional CFO, a finance manager, or a financial controller isn't just about titles—it's about aligning your business's needs with the expertise that can best address them. You don’t want to underinvest, overinvest or find an expert that doesn’t take anything off your plate. To navigate this decision effectively, consider the following key factors:
Size and complexity of your business
Smaller businesses with straightforward financial operations might not need a CFO right away. A finance manager or a financial controller could suffice, potentially even on a part-time basis. However, as your business grows in size and complexity, you might find the need for more strategic financial guidance, at which point a step towards the CFO title could be crucial. A good midway point is to hire a fractional CFO to lead on strategy, while holding onto your finance manager or financial controller for lower level, day-to-day finance tasks.
Stage of growth
Startups and businesses in the early stages of growth often benefit from the strategic insight of a CFO to navigate funding rounds, investments, and rapid growth. If the cost of a full-time CFO is prohibitive, a fractional CFO can provide the needed strategic guidance without the full-time expense.
Financial challenges and opportunities
If your business is facing complex financial challenges or is positioned to take advantage of significant growth opportunities, having a CFO can be invaluable. Their expertise in financial strategy can guide your business through intricate financial landscapes. A fractional CFO can also offer this guidance on a part-time basis.
Assess your software requirements
If your finance software is no longer serving you, or you’re not sure you’re getting the most out of it, it may be worth looking into an interim CFO on a project basis, to run an audit of your finance processes and make them more efficient. This may mean switching to a new financial software platform or simply making changes to your in-house finance management.
Your management information
Are you at a stage where you have your management information in front of you, ready to feed into your new fractional CFO or full time CFO? If you’re not sure you have the data to hand over, you may need to consider taking on board a finance manager instead. This role will retrospectively organise your data and pull together any trends, before eventually handing over to a fractional CFO to interpret and guide. You may wish to keep this fractional finance manager on board indefinitely to continue sourcing and managing your data for you.
Understanding the cost-benefit analysis
When contemplating the addition of a finance professional to your team, it's crucial to conduct a thorough cost-benefit analysis. This involves more than just tallying up salary expenses; it requires a holistic view of the value each role brings to your business against the cost of their compensation.
For instance, a full-time CFO might command a higher salary due to their strategic expertise and leadership role in financial decision-making. However, the ROI can be substantial, as their insights can lead to cost savings, revenue growth, and risk mitigation that far exceed their cost. On the other hand, a fractional CFO offers a slice of that strategic expertise without the full-time commitment, providing a cost-effective solution for businesses not yet in need of—or not yet able to afford—a full-time CFO.
Finance managers and financial controllers, while less strategic, offer crucial operational and compliance oversight, ensuring your business runs smoothly and remains in good standing. By carefully evaluating the potential returns in terms of financial health, growth, and stability, you can make an informed decision about which financial role aligns best with your business's needs and financial capacity.
We’ll help you access the perfect fit finance expert
Your business's unique needs will dictate the type of finance professional you should onboard. Still unsure about what finance role your business needs? Contact us. We specialise in connecting SMEs with the right finance experts. Whether you need a full-time CFO, a fractional CFO, a finance manager, or a financial controller, we're here to help you find the perfect fit for your business. Let us assist you in navigating your business's financial future with confidence.
