In the life of any evolving company there is time when a chief financial officer must step on board and it's better to be a good one.
Article continues below
Let's make one thing straight, right from the start: a chief financial officer is not just a "person good with numbers." That was the case long time ago, but now CFOs must possess a range of skills that go deeper into company's strategy than just numbers shuffling. But, let's see first when is good time to start your search for a CFO.
As you company evolves, at one point it will require accounting, treasury, and tax functions, and all that mixed into an overall growth strategy. The first obvious sign is when you, the one man band, or your accounting chief can't handle all tasks.
If you need a formal audit, more complex tax reports, if you are thinking about selling or merger options - it's time to think about a CFO. As a rule of thumb, when your revenues are measured in millions, a CFO should be there.
So, how to find a good CFO?
First, we must know that that top financial person is the partner of the CEO who leads the company from the financial side to meet business goals. To do that successfully, your CFO may also be a senior executive to departments not directly related to finance, such as human resources.
As business evolve, so do CFO's roles. She have to be a good financial manager, know how to prepare financial statements and deal with investors, she must plan your tax strategy, develop financial relations with other companies, and follow all laws and rules and their changes.
As you can see, it's not easy to be a good chief financial officer; the scope of their knowledge is huge.
Your new CFO should have a sound knowledge of accounting to be able to follow domestic and international rules and requirements. That's why it's good to search for somebody who is a certified public accountant.
Since your CFO will be the main partner, the closest business person to the CEO, she must have good leadership skills. As any other top manager, hard skills are necessary and soft skills - are necessary too.
The job of the CFO is not to just crunch numbers, but to explain to shareholders and investors what you plan to do with that money. And, if necessary, to explain that to your board and employees.
You CFO especially needs good presentation skills. This is important if you are searching for investors, if you plan an IPO or simply want to present your business to other companies.
A good chief financial officer must be actively involved in industry organizations because rules are changing, laws are changing, and good business practices are also changing. That's why she must actively following all trends to be able to react when needed. ■