Bert Lebhar never knew he needed a financial professional until two years ago, when the president of Atlantic Remodeling, in Baltimore, did an annual presentation on growth plans to his advisory board. Virtually every member suggested that Lebhar hire a chief financial officer. Yet “no one could articulate exactly what a CFO did,” Lebhar says.
Chief financial officers essentially take charge of a company’s finances. “They set up systems and controls” that let owners see exactly where money is going, says Vaughn McCourt, a home improvement consultant and CPA in Tacoma, Wash.
At larger companies, a controller can manage the company’s general ledger and bank accounts. But at “a high-volume shop” — companies doing $6 million to $12 million in sales — a CFO becomes a necessity.
For Lebhar, who set out to expand his business, access to bank capital was critical. Since adding sales adds costs, banks want to know how well the company seeking money manages the money it already has.
Atlantic Remodeling’s new CFO immediately put together cash flow analysis spreadsheets, “showing me on a daily basis exactly where all our money was,” Lebhar says. That helped the company secure financing and freed the owner to focus on leads and sales. More importantly, creating that position gave Lebhar someone to be accountable to. “If you hire a good [CFO],” he says, “he will pay for himself and show you how he pays for himself in the first three weeks.”
—Jim Cory is editor of REPLACEMENT CONTRACTOR.
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