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Cash flow can have a significant impact on the overall financial stability and success of your business. Here’s what to look for when hiring a finance manager.
Cash flow management is one of the most important aspects of running your business. It is the process of understanding and optimizing the amount of money, cash and non-cash, moving in and out of your business. When your cash flow isn’t properly managed it can have a significant impact on your business’s operational success. According to a US Bank study, 82% of small businesses fail due to poor cash flow management or a misunderstanding of how it contributes to business continuity.
Without an adequate supply of cash, you will quickly encounter problems. You could find yourself unable to pay your debts, cover operating expenses or invest in new opportunities to expand. The financial stability of your business depends on cash flow, so it’s critical to ensure you manage it effectively.
Positive cash flow leads to profitability and provides the capital you need to reinvest in your business. Even if your business is cash flow positive, you need to handle cash flow correctly to be successful. Proper cash flow management should be strategic, and that requires a considerable amount of time, effort and financial knowledge. Therefore, it can be challenging for small and mid-sized business owners to undertake successfully without bringing in someone with the right expertise.
Cash flow management isn’t simple, but it shouldn’t be outright stressful either. If you have little experience or lack the knowledge to make cash flow-centric decisions, hiring a professional can be helpful. A qualified finance manager can help to ensure you have the cash you need to cover your operating expenses and scale your business in the most optimal, efficient and economical way.
Finance managers are more than just bookkeepers or accountants. They play a key role in the day-to-day operations and growth of your business. That’s why it’s vital to thoroughly research and understand what the role entails to ensure you choose the right person.
Generally speaking, they are responsible for managing the financial health of your business and nurturing long-term success. The job functions of a finance manager can vary from business to business. However, some common responsibilities may include:
Managing cash flow
Setting financial goals
Generating forecasts and financial reports
Analyzing market information
Devising financial strategies
Skilled finance managers concern themselves with financial planning, budgeting, allocation and disbursement, and evaluate potential ways to reduce costs. They will help you set financial goals for your business, and implement or develop the processes and framework to achieve them. Moreover, they should thoroughly understand how to analyze and interpret financial data and trends, use their learnings to inform financial strategies, and provide you with relevant and accurate financial reporting and forecasting.
When you’re ready to hire a finance manager, you first need to reflect on who you want in the role and what the responsibilities will be. What skills, experience and qualifications are necessary to do the job? For instance, the right person should have an analytical mind as well as the technical skills to succeed in the role.
Furthermore, because technology and accounts payable practices are constantly evolving, it’s important to hire a progressive finance manager who will continually adapt and think outside of the box. It’s to your advantage to hire someone with an innovation mindset, who will leverage diverse financial resources when needed.
Skilled finance managers should seek out nontraditional tactics and up-and-coming technology that can help your business grow. For example, they might implement early payment programs or dynamic discounting technology to leverage outstanding invoices to increase working capital without taking on more debt.
A qualified finance manager will typically hold a minimum education of a bachelor’s degree in finance, accounting, economics or business administration, accompanied by one or more of the following licenses or certifications:
Certified Public Accountant (CPA) – A widely recognized license for accountants.
Chartered Financial Analyst (CFA) – A popular license for financial analysts, investors and consultants.
Certified Financial Planner (CFP) – A gold standard certification for anyone looking to show their expertise as a financial advisor.
Financial Risk Manager (FRM) – A globally recognized certification for financial risk management.
When determining whether to hire in-house staff or outsource the finance manager role, you should look at your business needs because there are pros and cons to both options. While we generally recommend hiring an in-house finance manager, making the right choice for your business can depend on factors such as cost, expertise and flexibility.
Hiring an experienced in-house finance manager can be more costly than outsourcing, but it has many benefits and can offer a significant return on investment. An in-house finance manager provides you with more control, security and the ability to meet your unique finance and accounting needs.
Typically, an in-house resource will have more intimate knowledge of your business and industry than a freelance contractor who provides the service for several clients.
Therefore, a dedicated in-house hire, who is solely focused on your business, is better positioned to help you align your financial goals and processes with your operational needs and growth objectives. In contrast, when the duties of a finance manager are outsourced or split up with someone who has little inside knowledge or experience, it can lead to mistakes and missed opportunities for your business.
If you’re ready to hire a finance manager and you don’t have an HR department to assist, you might be unsure where to begin your search. Here’s a list of helpful recruitment tactics to consider:
Seek advice from your financial partners, advisors, technology providers or current vendors.
Use your existing relationships — people you work with might also have experts who can provide you with helpful advice or referrals. For example, C2FO has dedicated relationship managers.
Ask your employees for referrals.
Consider asking your employees if anyone in their network might be a good fit. Referrals can be a great way to find a qualified candidate for your company.
Hire an internal candidate.
Do you have an existing employee with the right skill set? Consider promoting from within. Hiring an internal candidate could save you the time and money you’d otherwise spend on onboarding and training a new employee.
Post the position on notable job boards.
Consider posting the role online on job boards such as Indeed or LinkedIn to attract quality candidates.
Share the job via social media.
If your business has a social media presence, you can use your accounts to promote your finance manager job post to a wider audience.
Use networking opportunities.
Leverage industry events, conferences and trade shows to make connections with finance professionals who may be looking for a new career opportunity.
The size of your small to mid-sized business doesn’t matter; the knowledge and experience a finance manager brings can help your company survive and grow. Hiring someone to manage your finances is an important decision, and it goes far beyond day-to-day bookkeeping. The stability and future success of your business relies on adequate cash flow, so it’s critical to ensure it’s properly managed.
Hiring a finance manager is an investment in your business. Therefore, it’s essential to evaluate your needs, financial goals and budget prior to making a decision to hire. It’s also important to ensure you understand what the role entails, and what qualifications and skills to expect from an experienced finance manager.
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