It's often difficult for business owners who lack specialized financial training to determine what type of expertise their companies require. Here's a quick checklist to help you analyze your company's needs:
Bookkeeper: A bookkeeper makes sense for a company that's quite young, quite small or quite strapped for cash. Expect a bookkeeper to keep accurate if basic financial records--certainly detailed enough to help an outside accounting firm prepare taxes and, if needed, to do audited year-end financial statements. A bookkeeper should also be able to handle your accounts payable and receivable; recruit for a "full-charge" bookkeeper to get the highest level of expertise available at this level.
Controller: If significant growth is in your plans, you should hire a controller as quickly as you can afford to. That's because every growing company, even a young one, requires the skills a controller possesses, and it will grow faster with them. A good controller can do everything a bookkeeper does but also much more--mainly because he or she is trained to have a larger perspective beyond day-to-day numbers. Count on your controller to choose and maintain the right accounting software for your company, to generate timely weekly and monthly financial reports, and, of course, to keep cash flow on track with a well-run payables and receivables operation.
Chief Financial Officer: There's no hard-and-fast rule that will tell you when to upgrade from a controller to a chief financial officer. "If all you need is a relatively small credit line from a local bank, hiring a CFO is probably unnecessary," explains Brian Benz, a chief financial officer with 12 years of experience at entrepreneurial companies. He's currently the CFO at Yoyodyne Entertainment. "But if you're going to be looking for a multilayered financing arrangement or dealing with professional investors or the public markets, or if you envision ongoing, complex financing deals like a long-term factoring relationship, then a well-qualified CFO will probably help." Expect your CFO to know how to navigate the various capital markets; the best candidates will have raised capital for at least one company before yours. A qualified CFO will be able to prepare a comprehensive business plan, complete with the kinds of financial and market projections investors look for. A competent CFO also knows how to handle in-person interviews with bankers and prospective investors. That will allow you to concentrate on what you do best: growing your company.
What You'll Pay Although salaries vary by region, here are some useful national benchmarks from Robert Half International Inc.
1997 Base Salary
% Change (from 1996)
CFO (at companies with less than $50 million in revenues)
$62,000 to $88,000
Controller (corporate level, at companies with $10 million to $50 million in revenues)
$54,000 to $71,250
Controller (corporate level, at companies with less than $10 million in revenues)
$47,000 to $61,750
Bookkeeper (full-charge, at companies with up to $15 million in revenues)
$28,000 to $36,000
Source: 1997 Robert Half and Accountemps Salary Guide, Robert Half International, Menlo Park, Calif.