As we are all getting back to work, many businesses are beginning to examine their processes and procedures to see how to blend the efficiencies of what we learned during the quarantine with the way we used to do things with departments full of people milling around our offices every day. We are also examining the employee skills that we really need to be effective and efficient going forward.
Businesses have lost employees due to being scaled back or, in many cases, shut down. Some employees are not being invited back and others are choosing to stay out on unemployment as long as they can. This phenomenon is providing tremendous opportunities for businesses to re-think how to staff for skills and efficiencies.
What skills do we actually need? How many people do we really need? Do they have to be in the office, or can they work from home? How do we measure output? How do we hold our employees accountable? Is working from home a perk? Can we add that as a benefit and adjust compensation accordingly? Some of these questions are better asked of an HR professional in order to get the appropriate legal opinion, while others are simpler and will depend on your situation and preferences.
Let’s examine Finance/Accounting departments. If you are a small company with simple accounting needs:
- A Bookkeeper or Staff Accountant will likely be enough to handle day-to-day activities. This will be a person who understands the basics of accounting and can handle your payroll, payables, receivables, bank accounts and simple financial statements.
- Internal Controls/Separation of duties will be more difficult to achieve and you’ll have to get creative using other employees for checks and balances.
- You can also supplement with a Fractional Controller to use one or two days per week or per month, depending on the size of your business, for reconciliations, review, cash flow analysis, forecasting, etc.
- Compensation of the Bookkeeper/Staff Accountant will vary depending on location, type of business, experience level, etc.
- The next logical hire could be an Accounting Manager. They will have stronger accounting skills and can take over the monthly accounting and financial statement preparation while the bookkeeper will handle the payables, receivables and lower level payroll data collection and input.
- The Accounting Manager will usually be working on an MBA or CPA, or both, and while the position may not require either, someone who is working toward these credentials will more than likely be a better long-term fit.
- The Accounting Manager will be able to assist with cash flow analysis, account reconciliations and some forecasting. They will also handle payroll review, salary changes, etc.
- If higher-level skills are needed, you can also complement this position with a Fractional Controller, similar to what was discussed above.
- Compensation will be higher than the Staff Accountant and the same variables apply.
- It’s time to hire a full-time Controller with an MBA, CPA or both, as a requirement for the position. These additional credentials are important because such a candidate will likely possess the analytical skills that will be needed to understand changes in the business as they occur.
- The Controller will be fully experienced in handling every responsibility in an accounting department and so will be a leader, manager, and mentor.
- Their primary responsibility will be to pull together the work from all other positions in the department, perform reconciliations, finalize/review/present the financial statements and create cash flow forecasts, budget forecasts, and annual plans/budgets.
- They will create (if necessary) and monitor internal controls. They will create and produce Key Financial Performance Indicators as well as research and present financial data as necessary to explain or support capital purchases, out-of-budget expenditures, and any other financially related issues.
- The balance of the department will handle the payables and receivables and lower level journal entries and create the framework of the monthly financials while handling other duties as assigned by the Controller.
- This will be your most highly-compensated full-time accounting position and will likely work the most hours. A strong Controller can mitigate weaknesses in the department and develop solutions for those weaknesses. The same compensation variables as above will apply. This is a critical position, and a quality candidate will possess a breadth of skills and will likely command a somewhat higher level of compensation, but often those additional dollars will more than pay for themselves in quality performance.
- If you need the functions of a Controller, but only a few days a month, the hiring of a Fractional Controller can be a cost-effective way to reap the benefits at an affordable price.
When you’ve grown large enough, it’s time to consider the addition C-level Officers, including a Chief Financial Officer. While this is the lead position in the accounting and finance department, a CFO will rarely handle the day-to-day transactional business.
- A CFO will assist the CEO and other C-level Officers with charting the future course of the organization.
- They handle banking relationships, financing and loan decisions, purchases and acquisitions, financial planning, Key Performance Indicators, financial risk mitigation, cash flow management, and all other financial leadership necessary.
- A quality CFO will have an active CPA license and/or an MBA degree and quite often will have other professional designations that demonstrate and augment their effectiveness. As such, a CFO commands a premium compensation package and will be worth every penny. The demands for CFO-level skills vary from company to company, and company size is often not the determinant of the need.
- If your company faces some financial and strategic challenges that aren’t being properly addressed and you do not want to make a large investment in filling the CFO position with a full-time employee, you can hire a Fractional CFO to provide you with executive-level skills at a fraction of the full-time cost. The structure of these engagements should be variable based upon the needs of your company and, as a result, will be far less costly while still providing much-needed guidance and oversight to the company. This structure provides you with a superior skill set when you need it, while not being burdensome to your company.
You may have similar considerations for other functions in your company, and this same approach should be used to assess your needs to determine the most effective outcome for your circumstances. A healthy mix of full-time and fractional positions can often yield the results you need at the most effective price, and with the acceleration of the adoption of virtual work environments, many companies are thoroughly examining what they truly need and the options that are best suited for filling those needs. It is likely that the companies who are in the best position to successfully emerge from the difficulties we are encountering in today’s environment will be able to do so because they have made important adjustments to their staffing and are able to more effectively address their needs with the right people in the right positions in the most cost-effective manner.
At Nperspective, we take immense pride in providing our clients with sophisticated, skilled professionals who possess superior strategic management and problem-solving skills. The flexibility of our arrangements allows us to deliver the expertise our clients need when they need it, and our breadth of capabilities yields many solutions to the needs of our clients.