Tips to build out your Finance Team

#Newsletter 19

I’m launching my info product next week! 🚀

S/o to those who replied to last week’s request with some good suggestions, I’ll be drawing the winners for the giveaway next week!

The product will now include:

✅ 15 Finance Checklists, Sheets and Guides
🎥 Video walkthrough for each sheet
📃 3 templates to use

The only thing left is to figure out the price, good thing I wrote about that last week ; ).

I wanted to write a practical newsletter this week.

In previous newsletters, I’ve covered elements to help you improve your financial performance…

• Pricing

• Cash Flow

• Business Plans

But today I wanted to talk more about the actual implementation side of it. Because just like your sales, marketing, operations and HR functions, you will likely not be doing all this yourself (forever).

When you’re business grows, you’re going to need to hire people.

So in this edition, I want to give an indication of how I would build out the function that takes care of all the financial topics.

As you will see, this is much more than just hiring a bookkeeper or accountant. Because I do believe a good finance team should be able to help you increase both your top and bottom line. This investment should pay for itself.

This was inspired by a previous tweet from Connor:

Let's dive right into it!

Ps. I put all costs in $ just because most readers are from the US. Prices are pretty similar in £ and €.

1 | Hire a Bookkeeper

Think of bookkeeping as the heartbeat of your business. This is a role you want to hire for ASAP.

Example: imagine you're running a webshop where you sell boxes of meat. You've just had a couple of sizeable orders, and are now sending invoices and collecting payments. If these transactions aren't recorded and categorized, you may struggle to understand your cash flow or even meet tax obligations. A bookkeeper makes sure that these financial details are always in order.

Why not do it yourself?

1. It's not the best use of your time.

2. You probably don't know how to do it properly (sorry not sorry)

Consider this an investment - one that pretty much always pays back for itself in the form of better (financial) decisions, potential tax savings or an increased business value.

Besides, you won’t ever get a loan approved without it.

Cost: $250-$2.5K p/m

2 | Get a CPA/Tax Advisor

Taxes… one of the few certainties in life. Having a CPA or a Tax Advisor on board from the get-go is a no-brainer.

A lot of these advisers even promote their service with a guarantee to save you money. While that can be dangerous as it could lead to short-termisn just to save taxes, they do usually come through.

Besides, these experts not only make sure that you're meeting all legal obligations, but they can also offer advice to leverage tax benefits, like claiming R&D tax credits or capitalising certain assets.

Remember, taxes are likely one of your largest expenses. Pays to have an expert to make sure it’s optimised.

Cost: $1K-$5K per year

3 | Hire a Fractional CFO

Once your business is earning between $1M-$20M, a Fractional CFO becomes worth considering.

This is what I do. So take what I say here with a grain of salt hehe.

But let’s say you're the owner of a rapidly growing e-commerce business and you're considering expanding to new markets. A Fractional CFO can offer guidance on making these decisions, from cash flow projections to risks and market analysis.

And so one of the greatest benefits of a Fractional CFO is their ability to help build a robust financial strategy. This includes setting financial targets, pricing your products or services, tracking key performance indicators (KPIs), or supporting you with acquisitions or raising capital.

In addition, a Fractional CFO can bring an objective perspective to your financial decisions, helping you avoid potentially costly mistakes. This alone can be worth the fees.

Cost: $2K-$10K p/m

4 | Hire a Full-Time Controller

When the business keeps growing in size and complexity, you want to start considering putting a full-time person in place. This is usually from $20M in revenue and upwards.

The Financial Controller overlaps with the bookkeeper, CPA, and even the CFO. But where a CFO leans towards strategy, a controller handles the day-to-day stuff like bookkeeping, accounts receivable & payable, payroll, etc.

Cost: $8K-$15K p/m

5 | Hire a Full-Time CFO

Finally, when you're operating at the $20M+ level, it's also time to think about a Full-Time CFO.

At this size, you need a dedicated specialist to head your finance function. A Full-Time CFO will manage relationships with banks and investors, guide on large-scale investments, and create a capital structure that aligns with the company's strategic goal

Cost: $15K+ p/m

Funny or cringe? You decide…

Last thing: there are tons of nuances to consider. These thresholds can vary depending on your market, industry, cash flow dynamics, and your own financial literacy.

Still, this could serve as a useful guideline.

Best of the Week

A simple but sweet tweet this week. I liked this one so much because it highlights the “unexpected” impact of certain decisions.

For instance: you can cut costs all you want to increase profits, but at some point you are hurting your growth.

This strategy from Dom should be implemented by every business.

My request for this week is to keep an eye out for next week’s newsletter!

This is where I will be launching my info product.

Or if you want to talk about Finance just reach out!

See you next week,

Joey