Role of a CFO: Exclusive Talk with Philip Zhang, CPA
A CFO is a person involved with financials of a company. Most of the startups and small businesses do not plan to hire a CFO for their company. These firms hire unless they are in financial management trouble or required by investors.
The question which arises here is when is the best time to hire a CFO for startups and small businesses. Are there any other options apart from hiring a full time CFO.?
In an exciting talk with Philip Zhang, it was very nicely explained by him about roles and importance of a CFO in a small business or startup. Philip Zhang himself is a CPA based in Nevada. He is the founder of Philip Zhang CPA, Ltd., “The Accounting Experts” and has over 15 years of public accounting and private industry experience.
Philip explains the CFO’s role and some fundamental reasons why a startup or small business should at least hire a part-time CFO.
According to Philip, CFO plays the controllership role by presenting and reporting the current and past financial data. The entire team including shareholder, investors, co-founders, and employees depend on these reports for future decisions. Hence, if a startup or small business is running without a CFO or CPA consultation, then it can be really risky especially regarding financials of that company.
Apart from controllership role, a CFO also addresses the issues regarding the capital structure of a startup and small business. He helps the company to decide how and where to spend the company’s money considering liquidity and risks. Another significant role of CFO is the economic strategy and forecasting for business. Financial modeling and forecasting are essential especially early growth companies. Financial modelling helps to understand where the money is coming from and where to invest more.
While it looks straightforward to handle company’s finances by just using accounting software, but it’s the not same case always. As a business grows, financial responsibility grows for that company in terms of tax, financial modeling and projections. Hence it is crucial to hire a full time or a part-time CFO for a business which is growing.