“At what revenue level do I want a CFO reviewing my business on a monthly or full-time basis?”
This is the type of question we get asked a lot. Many business coaches and business books out there talk about finances being the foundation of a successful business, but nobody really defines finance for an entrepreneur. So, here is some quick practical advice: behind every successful entrepreneur is a financial relationship that helps guide that person through their journey.
A good example of this relationship is Warren Buffet and Charlie Munger. Charlie supports Warren in his visions while giving him the financial information that he needs to make great business decisions.
From a practical standpoint, if you run your own business and bring in revenue, you want to be meeting with a tax professional during the year (outside of getting your taxes done). Ideally, that would be sometime during Q4 when you still have some time to make the most out of entrepreneurial tax benefits. You should have both a short term and long-term tax plan that you look at throughout the year to make sure you are doing everything you can to reduce your tax liability.
Once you get into the 6-figure mark and above, you should be doing that meeting on a quarterly basis. By meeting with your tax professional every quarter, you are able to revisit your tax plans and course correct if necessary.
When you get into the multiple 6-figures of revenue ($500k+) and are planning to continue growing your business, that is where you will want to go from having just a bookkeeper to more of a financial advisory professional / CFO. This person would come in on a monthly basis, handle your bookkeeping & accounting, and provide you with advisory services. This allows you to really look at your business and how it is doing, and course correct to meet your business goals as you go.
As far as a full-time CFO goes, CPA On Fire helps clients all the way up to the $20M and beyond. The decision to hire a full-time CFO depends on the complexity of the business and the size of growth in the future.
CPA On Fire’s managing member, Ron Parisi, talked more about this on March’s Entrepreneurs On Fire Income Report – you can listen to that here!
CPA On Fire is an online accounting firm for online entrepreneurs. We have extensive knowledge on working with entrepreneurs who have businesses in the ecommerce, coaching, and other online business communities. If you are looking for a highly qualified and experienced accountant, let’s connect! We will show you what we can do for your business to help you grow exponentially.