In a previous post I discussed indications that it may be time to bring on a full-time CFO or interview outsourced candidates. Now that we know when to find someone, let’s discuss what we should look for. Even though your choice of CFO will depend on your vision for the future of your business, there are some key fundamentals to consider when hiring a CFO:
A common misconception is that the most important skill a prospective CFO should possess is acumen around technical side of accounting. While your business may need technical expertise, the primary skill you should be looking for is strong management capability. A good CFO is good at the technical side; a great CFO understands his position is a managerial position and is able to oversee many duties and manage people, stepping into the technical side where necessary.
This is your chance to add to your strategic management team—your chance to find someone who’s been on this ride before and either learned some valuable lessons or was successful before. As the CFO, their role will be to analyze the past, interpret the present, and help plan for and prepare for the future. Running various strategic scenarios is much more possible with someone who’s been there before, and is adding their ideas and expertise to the mix. Have strategic conversations with them as part of the interview process.
Not all CFO’s are created equal. Not only will skill-sets vary, but the most easily distinguishable characteristic is the industries in which they’ve worked. A good CFO will learn your business, but the transition will be much smoother if they don’t have to learn an entirely new industry.
Excellent Accounting Skills
While managerial acumen is of primary concern, it is not the only skill needed. With a regularly changing regulatory business environment, knowledgeable CFO’s will have been strong accountants in the past and have stayed abreast of accounting changes. Even though this is not a mandatory qualification, it may help your business if you’re in a position where reporting is a regular necessity.
Excellent Communication Skills
You’ve likely raised money, presented, and managed alone to this point. Hiring a CFO with good communication skills will not only pay off when it comes time to fundraise, present complex financial information simply, but these skills are also very important in management. The role you’re hiring a CFO for now may not be the same role you’ll need him/her for in five years. Think long-term and strategic.