Luca Pacioli and Benedikt Kotruljevic both have been credited for inventing double-entry bookkeeping. The system has served as the backbone of accounting since the 15th century. At the same time, there’s always been a need for someone to properly analyze the data. Enter the chief financial officer.

What’s a CFO? The term takes on different meanings. For some, a CFO records financial transactions and prepares monthly financial statements. For others, a CFO manages the accounting department and, to some extent, the information technology department.

While the roles could be different depending on the size and complexity of an operation, the overall responsibility of a CFO is to serve as a strategic steward adept at recognizing and optimizing the financial objectives of the company.

A CFO not only looks at such historical financial information as last month’s financial statements, but also looks ahead to the direction in which the company is headed. The use of historical financial information is only a small part of the analysis. A CFO also incorporates such external factors as economics, politics and even weather.

To perform this analysis, a CFO must review and decipher volumes of information quickly and efficiently. One of the tools the CFO uses is to analyze the key performance indicator. A properly set up KPI, whether built in Microsoft Excel or purchased through a third-party software vendor, puts the CFO in command of financial operations. These KPIs allow the CFO to identify such important indices as break even on production, cash-on-hand needs and cost fluctuations. Absent a market collapse or natural disaster, a company should never be surprised at its financial condition at the end of a fiscal year.

Most CFOs command an annual salary of $120,000 and up depending on company complexity and the qualifications of the individual. For that investment, the company has someone capable of analyzing historical information and projecting upcoming needs. This in turn equips the owner or chief executive officer with the tools to lead the organization in coming months and years.

Given the investment involved in hiring a CFO, what can a smaller business do to tap these resources?

First, make sure your processes, procedures and controls are as strong as possible. To have someone properly analyze your data, you first need to generate data that’s accurate and complete.

The easiest barometer to test this is to look at your annual tax return or financial statement audit. Is the accounting firm that provides the service posting multiple adjusting journal entries each year? If so, then your data isn’t accurate and complete.

Second, consider hiring a consulting CFO. There are many former CFOs who’ve retired that have the desire to do some part-time work, but aren’t interested in a full-time position.

Tap these individuals, especially for their years of experience. A few hours a month could mean the difference between struggling next year and being positioned for the next wave of customers.

Third, consider using your CPA firm. Most CPA firms have individuals with 10 years to 30 years experience in various industries. This experience, combined with the stringent requirements to become a CPA, give you access to individuals with a high technical competency. When selecting a firm, choose one that offers multiple core services in addition to tax returns — such as auditing, forensics and litigation support. Those additional services expose the firm to situations that would be beneficial for any company.

However you decide to use a CFO, the person should be adept enough to properly analyze your accounting information and give you guidance for the next month and year.

At the end of your fiscal period, you should never be surprised with the results.