When Should a Small Business Hire a Finance Chief?

By DARREN DAHL 
via NY Times: 

At Quickoffice, which sells software that allows users to create and edit documents on mobile devices, Alan Masarek always enjoyed getting deep into the numbers of his business — almost as if he were chief financial officer instead of chief executive.

That is because Mr. Masarek, who helped found the Plano, Tex., business in 2002, has a background in finance. “I always wore two hats in my business: the C.E.O. hat and the de facto C.F.O. hat,” he said, adding that he relied on staff accountants and a controller to help him run the everyday accounting functions of the company.

That changed in 2010, when he decided to hire a full-time chief financial officer. “Not every company needs a C.F.O.,” Mr. Masarek said. “It depends on how dynamic the business is. I needed to hire someone who could function as my business partner and allow me to step away from the books so I could manage other aspects of the business better.”

Generally, as start-ups grow, they hire outside accounting firms. Often, the accountants handle only the taxes and maybe the payroll. If the company continues to grow, and its financial reporting requirements become more complex, the chief executive might decide to bring on a full-time controller who can take charge of maintaining the business’s general ledger and bank accounts. On the other hand, the decision to bring on a finance chief is often tied to strategic decisions, like performing competitive market analysis, raising capital or securing credit.

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