The Role of a CFO at a Startup

When most people think of a Chief Financial Officer (CFO), they think of an individual who wears a suit, carries a briefcase, and works for a large corporation. However, this position isn’t only reserved for enterprises employing thousands of people–startups need a CFO, too.

In large organizations, CFOs tend to focus on financial reporting and compliance initiatives. Startups, however, are a different beast. CFOs at startups are usually involved in everything from fundraising and financial planning to compliance and cost management, which makes their role more vital.

Duties of a Startup CFO

A startup CFO provides financial leadership and helps to ensure that the company for which they work is financially healthy and achieving its goals. In addition to the responsibilities listed above (i.e. fundraising, financial planning, compliance, and cost management), the CFO may also engage in these specific activities:

• Raising capital from venture capitalists, angel investors, and other sources.
• Keeping investors updated on the financial health of the company and answering any questions they may have.
• Preparing financial statements and other reports to give investors and board members visibility into the company’s finances.
• Managing the company’s cash flow to ensure that there is always enough money on hand to meet payroll and other obligations.
• Controlling costs and improving profitability.
• Developing long-term plans for growth and expansion.
• Ensuring the company has adequate insurance coverage for all risks faced by the business.

Other CFO responsibilities may include IT, facilities, HR, and even legal functions.

Benefits of Outsourcing the CFO Role

We’ve established how important CFOs are for a startup — but startups don’t always have the budget to hire an in-house Chief Financial Officer (CFO). Let’s take a look at the top benefits of outsourcing.

1. You’ll save money.

One of the main reasons to outsource your CFO role is because it will save you money. When you outsource this position, you only have to pay for the services rendered, rather than paying for a full-time salary, benefits, and office space. This can be a great way to cut costs, especially in the early stages of your startup, when every penny counts.

2. You’ll get expert advice.

When you outsource your startup’s CFO position, you can tap into a wealth of knowledge and experience that you may not have had access to otherwise. This can be invaluable as you look to grow your startup and make smart financial decisions.

3. You can focus on the more important aspects of your business.

Many startup founders feel there are always a million things to do and not enough hours in the day to do them all. Having someone else handle your finances frees up time for you to focus on other aspects of your business, such as marketing or product development.

Another great thing about outsourcing your CFO role is that it provides flexibility and scalability. If your startup is growing quickly and you need more financial help, it’s easy to ramp up the services you receive from your outsourced CFO.

On the other hand, if your business is slowing down or facing tough times, it’s easy to reduce the amount of financial help you receive from an outsourced CFO without having to let anyone go — and they’ll help you strategize to help you through the tough times, too. This type of flexibility is difficult to come by with an in-house team member.

Why Your Startup Needs a CFO

The role of a Chief Financial Officer (CFO) is critical for startups. A good CFO can provide financial leadership and help to ensure that the company is financially healthy and achieving its goals. Hiring a full-time team member may not be possible, which makes outsourcing a great option.

As you continue to grow your business, consider outsourcing this important role to an experienced professional who can help your business thrive. With Punch Financial as your trusted CFO, you get so much more than bookkeeping — you get expert business strategies aimed at helping you achieve your goals.