Posted by Maya Pillai

The financial health of your small business reflects the health of your business. Hiring the right people to manage your financial performance will enhance the profitability, maximize the cash flow, and thereby provide an edge over your competitors. At some stage of your business life cycle you need to hire a financial professional. This should be as per your business needs and level of the growth of your company. When the business is small, hire a bookkeeper, as the business grows you need to either have an in-house accountant if possible or you should have a part time accountant to look into your accounts. A Chief Financial Officer(CFO) or controller is what you need when you take your business to the next level.

Remember the business is all about the numbers and to many maybe overwhelming and complex. When you are in the startup stage it’s wise to concentrate on the business building. However, when you start expanding you need to know that the financial system of your company will have an impact on the success of rate of your company.

However, if you are not clear about when to hire or expand your financial team, the following pointers will help you.

When To Hire A Bookkeeper

  • At the time of start-up- A bookkeeper can help you out in keeping the records, handle all the financial transactions and also generate quarterly financial statements.
  • If you do not know how to read balance sheets- You need to seek the help of a bookkeeper when you are unfamiliar with cash flow planning and generating and reading balance sheets. A bookkeeper will help you understand the nuances of understanding how to plan as well as read your company’s balance sheet.

It’s always better to hire a bookkeeper if you are a solopreneur or a small home-based startup as it could be expensive to hire an accountant.


When to Hire an Accountant

  • Inducting employees- When you consider expanding your staff at any point of your business life cycle you should seriously consider hiring a small business accountant or outsource your accounts to an efficient accounting team. They would be able to advice you on the payroll implementation, staffing costs and also suggest ideas to improve your profits.
  • Changing business ownership and structure- An efficient accountant should be able to double up as your financial advisor when you make a business decision to change the business structure. He should be able to guide you through the process of changing from a proprietorship or partnership to a limited liability corporation.
  • When opting for outside financing- When you approach a bank for a loan, it would be good if you have services of an efficient auditor. He can create the project report highlighting your financial position to get the approval of the bank for the business loan.


When to Hire a CFO

Rapid expanding stage- When your small business experiences a steady and fast growth, then it’s wise to hire an in-house CFO to head your accounting team. He can advise you on strategic as well as complex finance management issues. For instance, if you are planning for complex fund raising tactics or Initial Public Offering (IPO), its suggested that you hire an experienced CFO to help you deal with the investors.

If your business is a start-up that is operating with one-person and has only basic financial transactions, then all that you need is a good financial and accounting software. However, if you are planning to expand then you need a team as well as a premier financial package. Many startups fail mainly due to the lack of understanding on how to manage their accounts and finances.