by Marty Koenig and Keith McAslan
Partners at CxO To GoTM
Before hiring a financial executive to guide your company, ask these 6 questions to ensure that you don’t end up paying a whole lot of money for services that are not what you need, expect or want. Hiring an on demand or part-time CFO does not have to be a confusing experience. Instead, it can be the most empowered decision you ever make for your company.
1. How do I know if I need a CFO?
Many small companies have a bookkeeper, accountant or CPA. Their roles are important, but very limited in scope compared to the experience of a CFO. Bookkeepers and accountants function mostly in the day-to-day work of keeping up with your records and taxes.
Even a controller is often seen as a “number cruncher” that spends a lot of time with their nose inspreadsheets and doing reports. A CFO is very different and provides far greater value to small businesses.
Here are some examples of why a small company might need a CFO:
- Rapid company growth has stretched the capabilities of your current accounting staff to the limit, but you still cannot afford a full time senior financial executive.
- You are planning a major expansion and can benefit from adding an outsourced CFO and trusted advisor to your management team.
- You need assistance in dealing with bankers, lenders or outside investors.
- Your company is in a crisis, experiencing financial or other difficulties and requires strong financial leadership that cannot be provided by your current accounting staff.
- You need specialized financial expertise not available internally, and could use the help of an experienced CFO to mentor and coach them to do better at what they do.
- You are planning an exit from your company with a merger, acquisition, or sale and want to gain maximum value and sale price in the future.
- Your CFO leaves unexpectedly and your company has no one internally with the skills and experience to take over. Until you complete the search for a replacement, CxO To Go can provide the financial expertise to keep your business running smoothly.
- You need a periodic financial advisor to keep your company on track, someone that is dedicated to your company as it grows.
- You are a new start up company and want professional advice to begin your financial management correctly.
2. What questions should I ask a CFO to be sure he/she has the experience and personality traits to help me?
Throughout your conversation, determine if the CFO is a people person, not just a number-cruncher. His/her people need to like him and trust him, and he/she needs to inspire everyone around him. Some accountants and professionals do not enjoy working with a lot of people and collaborating for success. These types will never be successful CFOs.
