What to Look For in a CFO

Desk of Contents

When Ought to a Startup Rent a CFO?

A startup ought to rent a CFO when its in-house funds are advanced sufficient to require a full-time, devoted strategic useful resource each day. Corporations which can be persistently welcoming new workers, repeatedly launching new merchandise, making ready for a second spherical of fairness financing, experimenting with completely different types of debt financing or planning for worldwide enlargement ought to strongly contemplate hiring a CFO.

Strategic initiatives resembling these are indicators of a high-growth firm — and it’s completely wonderful in the event you’re not there but. Many corporations are capable of operate with no CFO of their earlier phases.  Earlier than they rent a CFO, founders ought to look to advisors and buyers for strategic monetary steering. Early on, you received’t want this recommendation on daily basis.

Startups can outsource tactical initiatives resembling bookkeeping earlier than hiring a CFO. Some corporations will make a extra tactical rent — resembling a controller or accountant to handle bookings and deal with minor strategic issues — earlier than discovering their full-time CFO.

What Are the Most Vital CFO {Qualifications}?

Crucial {qualifications} for a CFO embody:

1. deep finance and accounting data;
2. robust communication abilities;
3. pure management means;
4. business understanding;
5. technical and enterprise acumen.

1. Deep Finance and Accounting Information

Your CFO ought to have a robust understanding of the monetary facet of firm constructing, backed by real-world operational expertise. Chief monetary officers ought to have a mastery of forecasting, state of affairs modeling, efficiency analytics and investor communications.

They need to know how you can create and keep related and dependable monetary fashions, projections and different collateral. Past the spreadsheet, your CFO should be snug figuring out and driving strategic initiatives resembling course of enchancment and system implementation.

2. Sturdy Communication Abilities

This could be an important of the important CFO {qualifications}. A CFO might construct probably the most strong monetary statements, forecast analyses or KPI decks on this planet. If no person is aware of what they’re speaking about or what these numbers imply, then all that work is for nothing.

Crunching numbers is barely half the job. The opposite half is making these numbers significant and actionable for the management group — and the remainder of the group. As an illustration, if the CFO experiences a development of accelerating buyer acquisition price, they have to additionally assist the group perceive what meaning, why it’s vital and how you can enhance it.

3. Pure Management Capacity

This high quality is critical for anybody in your C-suite — the CFO included. As you develop, your CFO can be accountable for constructing an awesome group, growing expertise, empowering their direct experiences and delegating tasks to speed up output. They’ll additionally need to make tough selections as your organization faces the inevitable obstacles of scaling. Efficient management is a must have and an space for steady growth.

4. Business Understanding

The C-suite is accountable for defining and executing the strategic targets of the group. To do that correctly, they have to perceive the business — particularly if they’re eager to disrupt it. The CFO wants to grasp business developments, product and pricing methods, contract construction and rules. Whereas deep experience could be discovered, a robust understanding is a crucial place to begin.

5. Technical and Enterprise Acumen

Yearly, new FinTech instruments and platforms emerge within the finance and accounting world. Your CFO must be adaptable and tech-savvy, capable of simply study new instruments whereas additionally figuring out which instruments enhance your effectivity and are price investing in. Be cautious of any CFO candidate that insists they’ll solely use Microsoft Excel 24/7.

What To Look For In a CFO

Your organization’s CFO ought to exhibit the next qualities:

1. an eagerness to drive your organization’s targets;
2. the flexibility to deal with completely different features of the job;
3. a dedication to readability and communication;
4. abilities that complement your management group; and
5. alignment together with your firm’s wants.

A Aim-Driving Persona

Some persons are extra inclined to drive change, whereas others thrive in a extra constant enterprise setting. When you’re main a high-growth firm, discover somebody that’s not simply trying to handle a monetary scenario but additionally needs to play a pivotal position in constructing the subsequent model of your organization.

We frequently speak about startup DNA when hiring for rising corporations. Search for a CFO that’s snug setting enterprise targets, dwelling amongst change, scrapping norms and altering methods on the fly.

Versatility

CFOs are referred to as on to deal with much more than finance. At York IE, I’m additionally dealing with matters associated to enterprise operations (human sources, IT, authorized, and so on), strategic planning and objective setting, efficiency metrics and danger administration/mitigation. Be sure you discover a candidate that’s up for that prolonged position and able to adapt because the enterprise setting modifications.

Dedication to Readability and Communication

Your CFO should ship dependable info with readability and consistency, together with a monetary mannequin that’s really dependable. In some ways, the CFO is the particular person most answerable for holding everybody accountable, as a result of accountability must be data-driven.

In a risky enterprise setting, powerful selections will have to be made. Readability is a prerequisite to getting that proper. Rent somebody that’s nice with the numbers and equally nice at contextualizing and speaking them.

A Complementary Talent Set for Your Management Staff

I like to think about an organization’s management group as a superhero squad. No mortal particular person might deal with all the issues they collectively handle. Nevertheless, whenever you mix their different talent units and personalities, the management group is ready to sort out no matter comes their approach, collectively.

Consider what strengths are already lined in your current management group. Perceive what complementary talent set the CFO ought to carry to the group. You’ll desire a numerous group of thinkers that may problem one another.

When you’re a technical founder, you may want a CFO with extra operational expertise. When you’re a founder with a gross sales or advertising and marketing background, it could be good to have a extra analytical thinker to steadiness out your creativity.

The Proper Match for Your Firm

No single particular person will save your organization or hack your progress. It’s not about discovering one of the best particular person with the largest company names on their resumé; you’re higher off figuring out one of the best match in your scenario.

Too typically, early-stage corporations rent the CFO for the logos on their resumé slightly than their abilities, strengths and hands-on capabilities. I’m not saying a big-name CFO can’t succeed at a startup, however ensure you’re hiring a CFO that matches the necessities in your firm’s stage and progress trajectory.

The place to Discover Monetary Experience

Now that you realize what to search for in a CFO, it’s time to begin discovering the appropriate candidate in your firm. When you’re not fairly prepared for a CFO — otherwise you’re searching for strategic sources to assist your current CFO — you may flip to York IE’s Company Technique and FP&A follow.

We assist corporations deal with complexities in monetary planning, forecasting, budgeting and modeling. Our group additionally helps strategic planning for organizational enlargement, fundraising, bookkeeping and general progress.

When you’re searching for hands-on, strategic steering together with your firm’s funds, let’s speak.