When I started my business, I didn’t consider finance as something important. My reasoning was: If I make enough money, everything will fall into place.
But it turned out that in order to make enough money, I needed to have some idea of how my business was working financially. I would buy more tools and services without looking at how these increased my profitability.
Now, don’t get me wrong. Everything worked out really well, and I couldn’t be happier. But I could have saved myself a TON of time, money, and effort if I had worked with a financial expert at an earlier stage. Especially the tax-part of a business is not easy to navigate without first studying it. And with so many things to learn, most startups simply can’t do it.
What does a CFO actually do?
That is something I have wondered about in the past. You see, the Chief Financial Officer seems to be this dude in a suit with a massive paycheck. He talks about numbers and most often shuts projects down.
In reality, a CFO can do many things. It depends on the business he or she is working for. Some CFO’s only work on getting funding and outsource everything else. Some have a more hands-on approach and work the numbers themselves.
What it comes down to is, a CFO is the most senior person that only works on the finance side of things. Everyone more senior has a more general role and responsibility.
So, one guy that keeps track of the financials in a startup is considered to be the CFO. On the other hand, the founder of the startup that also does everything else is not considered a CFO.