I just ran payroll for the last time.
Last month I hired a part time CFO who will be handling payroll and about a hundred other legal and finance related tasks that I’ve been taking care of since I started the company almost three years ago.
It was tough giving up this responsibility. Until now, I was the only one signing checks, dealing with employment and stock paperwork, going through the stacks of paper mail that’s delivered to my house every week.
But I got to point that I had to offload this work to someone else. It was getting in my way. I had a bookkeeper, but that wasn’t enough.
Being a founding CEO puts you on a slippery slope that takes you away from doing what you love most, working on the product that led you to start the company. I even wrote about this last year, but I didn’t take my own advice.
How did I end up spending so much time on operations work? It sneaks up on you. There was no single day when I had a giant stack of work on my desk and thought, “Hey, I should hire a CFO to take care of this for me!”
Instead, every day or every week, there was something new to take care of. New employees, new benefits, additional vendors, more bills to pay, more expense reports to review, more paperwork to sign. It just kept building up over time.
As these items come up, the CEO has to take care of them, there is no one else. And I enjoy doing this stuff. I grew up doing the books at my dad’s restaurant. But that’s a mistake. Even though you could do it all, it’s not the best use of your time.
Last month our new CFO came into the office and I transferred all the finance knowledge that was in my head over to her. It was an incredible relief. Not only did I gain a ton of time that I could now spend on product, hiring, and other more important tasks…I also gained peace of mind. I finally had someone else looking at our finances and helping me with the operations side of the company.
It’s hard to bring yourself to give up this responsibility, trust someone else, spend money on another expense. But believe me, it’s worth it. I should have hired a CFO a year ago.
Update: Got a couple good questions. When should you hire a CFO? Right after your raise a series A. Even if you are just 2 or 3 people, it’s worth it. You pay per hour so it doesn’t matter if it’s 5 hours per month or 50, it’s just great to have someone else dealing with that stuff.
What’s the difference between a bookkeeper and a CFO? We had a bookkeeper for a while and she did a great job paying invoices and keeping expenses in quickbooks. A CFO goes beyond that. Think of a CFO as a member of your team with a legal background. They can interface with your lawyers, handle all contracts, prepare an operating plan, and go beyond a bookkeeper.