The Role of the SaaS CFO Is Changing: A Guide for Finance Leaders
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The CFO’s duties include tracking cash flow and financial planning as well as analyzing the company’s financial strengths and weaknesses and proposing corrective actions. A financial controller is a senior-level executive who acts as the head of accounting, and oversees the preparation of financial reports, such as balance sheets and income statements. In addition to preparing reports, the controller’s responsibilities may also include compliance audits, monitoring internal controls, participating in the budgeting process and analyzing financial data to varying degrees.
- As a member of the senior management team, the CFO reports directly to the CEO.
- This means a more flexible budget, so you can dedicate more of your capital to hiring salespeople and other activities that will fuel growth.
- Business owners often handle their own bookkeeping for many reasons that include fear of delegating sensitive financial information, wanting complete control and keeping staff costs lean.
- In a competitive market, you may not have a diverse range of talent to choose from.
- Inevitably, there comes a critical juncture where you must hire financial leaders and specialists to take the helm and chart a strategic course as the business ventures into unfamiliar waters.
- But if the business is relatively small and simple, then it may be best to wait until the company is more established before hiring a full-time CFO.
Controllers in very low-margin businesses like commodity contract or product manufacturers are involved in managing the razor-thin margins to ensure the sustainability of the organization. For example, project-based businesses like general contractors might have a controller support the purchasing process to keep expenses in line and establish reporting to enable job/project profitability monitoring. To simplify the major difference, a CFO will often be involved in fundraising and finance strategy, whereas a controller’s responsibilities usually stop at ensuring accurate reporting. Up to a certain point you can likely get away with purely outsourced accountants. But when those transactions become overwhelming, it’s time to add a full-time expert to the team.
Match Financial Help to Business Size
Modern CFOs can actively participate in customer retention and support their company’s customer-facing teams by assuming collections responsibilities and owning them in house. Chris advises that all finance leaders focus on their foundational pillars before anything else. When navigating the transitional CFO vs Finance Controller: Whom Does your SaaS Business Need? period before hiring a CFO becomes necessary, a financial controller may be a better choice. Inevitably, there comes a critical juncture where you must hire financial leaders and specialists to take the helm and chart a strategic course as the business ventures into unfamiliar waters.
This includes monitoring and reporting on cash flow, investments, budgeting, payroll, accounts payable and receivable, taxation, and other financial areas. They are also responsible for ensuring compliance with all applicable laws and regulations. Overall, outsourcing a complete finance and accounting department enables companies to maintain optimal performance without having to incur additional overhead costs or take on additional personnel responsibilities. This type of arrangement can provide invaluable insights into an organization’s financial structure and ensure that decision makers have access to the latest industry data without sacrificing quality or accuracy. The Chief Financial Officer (CFO) of a company is the leader of the finance team and is responsible for setting the financial strategy of the organization. CFOs are also involved in developing strategic plans for growth and long-term capital investments.
When to hire a CFO vs. controller?
A CFO can free up your time by handling all the financial details of running your business, so you can focus on growing the company. The financial controller position is typically found in larger organizations and reports directly to the CFO. For many small companies, a bookkeeper will do the job, but what if your company outgrows the scope of bookkeeping and needs a dedicated person to manage the finances? That’s where the roles of Chief Financial Officers (CFOs) or Finance Controllers come into play. Your SaaS accounting and finance capabilities will need to adapt as your firm grows.
Having a Chief Financial Officer (CFO) on staff offers a number of advantages to companies. First and foremost, they provide financial expertise that can help the company make sound decisions. A CFO will have a deep understanding of financial statements, cash flow analysis, and investment options. This knowledge can be invaluable when it comes to developing strategies for the company’s long-term success.
When to hire SaaS finance and accounting expertise?
Beyond work, she’s a culinary enthusiast who infuses her travels with local flavors. When a company has a Financial Controller and a CFO, the controller advises the CFO concerning accounting standards, tax laws, tech stack, and other compliance regulations. They work like a well-oiled machine to ensure the company’s long-term sustainable growth. Generally speaking, $1MM in annual revenue is a minimum threshold to bring in a part-time CFO or contract CFO services, but some $500K businesses benefit as well. The common factor for those $500K companies is that they’re hungry to get and use financial insights. If you need a point person for financial strategy and a face for fundraising or investment, a CFO is an invaluable investment.
- But as your firm grows, you might start adding new products and services to the mix, and this complicates your business model.
- The controller also has oversight of the accounting staff and is responsible for making sure that transactions are accurately recorded and reported.
- A senior-level financial executive is responsible for managing the accounting department.
- A Controller is typically responsible for leading the accounting team, developing strategies to ensure financial stability, and acting as a liaison between finance departments and other areas of the business.
- But as revenue grows and operations become more complex, it helps to bring on a seasoned SaaS controller.
- The CFO is also typically responsible for managing the company’s treasury function, overseeing tax compliance and risk management.
Focused on future strategy, not just historic numbers, we help small to mid-sized businesses and startups reduce financial risk and grow. You get access to our consistent team of experts — priced by the hour, so you only pay for what you need. We’re collaborative, explaining what the numbers mean, rather than just emailing reports. Financial controller is a senior financial officer who supervises the financial department of a company and is responsible for its financial accuracy, performance, and compliance. The CFO or Chief Financial Officer is the senior executive responsible for managing the financial affairs of a company. A fractional CFO service that specializes in SaaS finance and accounting solutions can help in a number of ways.
This includes reviewing and implementing policies and procedures that follow generally accepted accounting principles (GAAP). The controller also has oversight of the accounting staff and is responsible for making sure that transactions are accurately recorded and reported. If you’ve grown to $50 million ARR https://quickbooks-payroll.org/ or more, a permanent position may make sense. There are several CFO duties that are common among both SaaS and non-SaaS businesses. These include strategic planning, business model development, fundraising and investor management, board and stakeholder management, and overseeing finance and accounting.
They may also be responsible for managing other business-wide issues, including IT, human resources, insurance, sales tax reporting, and federal income tax reporting, among others. Successful SaaS companies obsess over data-driven decisions to ensure sustainable growth. And the finance function is at the heart of these decisions, from cash flow management to bookkeeping, compliance, and accounting. In the current economic climate, the growth of a subscription business is defined by its long-term endurance, and you need to build an agile finance function to weather the headwinds. Chief accounting officers (CAOs) and financial controllers are both accounting experts who report to the chief financial officer (CFO)—but these two roles have subtle, nuanced differences. The controller oversees day-to-day accounting operations whereas the CAO is focused on tasks, such as corporate governance, risk management, and investor relations.