Hiring a Financial Team

This presentation is made possible by the support of the American People through the United State...
Financial Team
• Strategy:
– Chief Financial Officer
– Bankers, advisors, etc.

• Implementation:
– Controller
– Financial...
For a startup
•

No need to hire a CFO until ready
– CFO performs a strategic role
– Structures and guides the financial a...
Timing

Bootstrap

Revenues/seed

CPA and
Attorney
Review
Full-time
You or
Bookeeper
part-time
or Controller
bookkeeper

C...
CFO duties
• Manages the financial risks of the company
• Sets strategic tone for funding and spending

• Puts proper cont...
Controller
• Responsible for supervising the quality of accounting and
financial reporting
• Oversees the accounting opera...
Treasurer
• You should be so lucky as to need a treasurer
• Oversees investment activity on behalf of the company
–
–
–
–
...
Audits
• An objective independent examination of the financial
statements
– Increases the value and credibility of the fin...
Accounting Standards
• Accounting standards set the rules for reporting and reporting
formats
• US:
– Generally Accepted A...
Financial Controls
• Fraud can happen at all levels. Start with some simple rules
• Require two signatures for checks over...
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6.3 hiring a financial team

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6.3 hiring a financial team

  1. 1. Hiring a Financial Team This presentation is made possible by the support of the American People through the United States Agency for International Development (USAID). The contents of this presentation are the sole responsibility of Rick Rasmussen and do not necessarily reflect the views of USAID or the United States Government.
  2. 2. Financial Team • Strategy: – Chief Financial Officer – Bankers, advisors, etc. • Implementation: – Controller – Financial Staff (A/R, A/P, Payroll, Treasurer…) • Oversight: – Board – the audit committee – Internal and external auditors
  3. 3. For a startup • No need to hire a CFO until ready – CFO performs a strategic role – Structures and guides the financial aspects of the company • Before expenses and revenues – Set up books and statement of accounts • Quickbooks or other programs are good options – Set up can be done by part-time controller (Certified Public Accountant) – Carefully track expenses and monitor cash outlays • When you starting to raise money – Consult a part-time CFO in addition to your attorney • Once revenues start and raising second round – Consider bringing on a CFO – Consult with your board
  4. 4. Timing Bootstrap Revenues/seed CPA and Attorney Review Full-time You or Bookeeper part-time or Controller bookkeeper CPA setup Series A/B Controller and Part-Time CFO Hire CFO exit
  5. 5. CFO duties • Manages the financial risks of the company • Sets strategic tone for funding and spending • Puts proper controls in place – – – – Budget management Cost / benefit analysis Forecasting needs Securing new funding • Strategic partner and advisor to the CEO
  6. 6. Controller • Responsible for supervising the quality of accounting and financial reporting • Oversees the accounting operation – – – – Accounts Payable Accounts Receivable Reporting Insurance matters • Monitors internal controls • Countersigns on expenses and commitments • Works with external auditors
  7. 7. Treasurer • You should be so lucky as to need a treasurer • Oversees investment activity on behalf of the company – – – – – – – Cash management Liquidity risk management Issuing debt Foreign exchange and interest rate risk hedging Securitization Pension investment management Capital structure including share issuance and repurchase
  8. 8. Audits • An objective independent examination of the financial statements – Increases the value and credibility of the financial statements produced by management – Reduces investor risk and therefore cost of capital • Typically performed by accounting firms – Quarterly or Annually – Audited vs. unaudited financial statements – Can become expensive for a pre-public firm • An audit opinion is issued – Intended to provide reasonable assurance, but not absolute assurance, that the financial statements are presented fairly
  9. 9. Accounting Standards • Accounting standards set the rules for reporting and reporting formats • US: – Generally Accepted Accounting Principles (GAAP) – Governed by Financial Accounting Standards Board (FASB) and SEC • Europe, Canada, some others: – International Financial Reporting Standards (IFRS) – Governed by International Accounting Standards Board (IASB) • Other countries, esp Asia and CIS – Combination of rules. Buyer beware
  10. 10. Financial Controls • Fraud can happen at all levels. Start with some simple rules • Require two signatures for checks over a certain amount (e.g. $5,000) • Put a modest spending limit (e.g. $2,000) on all corporate credit cards except for one that is designated for larger purchases • If possible, separate out the accounts receivable function from the person who actually deposits the checks • Pay for an annual review of your books by a CPA or get a full audit if required by investors

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