[Top 11] What to Look for When Hiring a CFO?

22 Oct
what to look for when hiring a cfo

[Top 11] What to Look for When Hiring a CFO?

A CFO is a critical resource in every organisation. However, it is equally important to choose the right CFO partner for your business to reap maximum benefits. A lot of businesses are not aware of what to look for when hiring a CFO. By paying attention to certain important points, businesses can find the perfect CFO to navigate their business to success and profitability.

Remember, that a CFO is not just another accountant or finance manager. Instead, he is a strategic partner and leader of the business. This makes it important to choose the right CFO that is in line with the Company’s mission and goals.

In case you have realised you need a CFO for your business but are not entirely sure what to look for when hiring a CFO, here are some important points:

Industry awareness:

A CFO isn’t just limited to managing your Company’s finances. Instead, he needs to be aware of the industry dynamics to better strengthen your company against the competition. A CFO who has practical experience in your industry will already be aware of crucial factors that are required to succeed. In addition, he will be in a better position to deal with any challenges as well as be able to make the most of any opportunities that came by.

Financial competence:

The CFO will be the head of the financial department as well as all the expenses of the business. It is imperative to confirm your prospective CFOs financial competence. He should not only have sound accounting and financial knowledge but should also be well-versed with legal and tax compliances that are important for your business.

Should be reachable in need:

A CFO should be easy to reach in times of need. A lot of times, businesses don’t have the luxury of a lot of time when they need to make certain critical decisions. Having a CFO who doesn’t’ respond or is not there at such times can be problematic. Ensure your CFO is someone who can be reached when it is important and is actively present in all your businesses’ major decisions.

Should possess leadership qualities:

The CFO will play a huge role in moving your business forward. Along with streamlining your entire finance division, the CFO will also play a key role in taking strategic executive decisions for your overall business. Having someone who is a good leader and mentor can hugely benefit your business rather than someone who is not confident about his decisions. As the CFO will have to make decisions that impact everyone from the CEO to the low-level manager, he needs to be someone with strong leadership attributes to allow smoother and clear decisions with the support of everyone.

Excellent communication skills:

If you are wondering ‘what to look for when hiring a CFO’ be sure to put good communication skills on your list! The CFO will be required to deal with everyone who could have an impact on your business. He will need to communicate with senior executives, stakeholders, investors as well as low-level employees. In addition, the CFO will also be required to communicate with bank heads and possible investors to generate funds. Having someone who is confident and possesses great communication skills can boost investor confidence and help in generating more funds.

Analytical and solution-oriented:

A CFO has to constantly analyse large volumes of data to ensure that the business is on the right track. He should be able to solve problems quickly and handle whatever problems may arise. In a business, problems may not just arise due to lack of funds. However, change in regulations, supplier and vendor concerns, competition, all of them can create problems constantly. A CFO must be able to negotiate through all these problems in a quick and calm manner.

Hiring a CFO is an important process for every business and should not be ignored. Most businesses don’t hire a CFO thinking that an accountant can do the job. However, accountants don’t have the knowledge and awareness required to look at the bigger picture. Not that you know what to look for in a CFO, let us also look at the critical times when having a CFO can be highly lucrative for your business.

You are considering a public offering:

Becoming a publicly traded company is no easy feat and organising the finances at this time can be a huge task. A CFO can help ensure that all your finances are organised and used in an optimum manner. In addition, a CFO ensure compliance with all regulatory authorities preventing you from facing any legal trouble.

You have raised sufficient funds:

At any stage, when a business has just raised capital, it becomes critical to use the funds in a systematic manner. A lot of businesses make the mistake of burning through their funds very quickly. A CFO can instantly budget and prioritise expenses thus ensuring optimum fund utilisation at all times

Your business is expanding:

Growing a business is the sole purpose for most companies. However, along with growth also comes a lot of financial responsibility and demands. To ensure a healthy and continuous growth, it is important to channel the funds correctly from the start. A CFO can help invest the funds correctly as well as suggest the best way to move forward for your business.  

You are considering a merger or acquisition:

At such a time, having a CFO on board is vital. There are several factors to consider and deals to negotiate. Without a CFO on your side, you can be rest assured of getting the best deal that suits your interests.

You are spending too much time on finances:

As a CEO or senior manager, there are a million other responsibilities that you need to deal with. If you are constantly working on handling your finances, some important tasks are going to fall through the cracks. In addition, you may not have the understanding to take the best financial decisions. Having a financial expert like a CFO can be greatly beneficial and allow you to spend your time on the core business.

Thus, a CFO is an important resource in every business. However, having the right CFO can be even better. By knowing the important factors of what to look for in a CFO you can choose the right fit for your company.