How to Choose the Best CFO for Your Business


How to Choose the Best CFO for Your Business

Small business can benefit from the advent of a new profession, the part-time or virtual Chief Financial Officer (CFO).

The designation of CFO comes from the corporate world being the title often applied to the internal accountant who is responsible for the full accounting and reporting functions of the business. In summary, a CFO uses historical information to plan for the future and provide the owners with financial insights and support on a regular basis.

For more details about the different roles of bookkeeper, accountant and CFO, have a read of my previous Smallville article, When do you need a CFO to improve your business.

Consulting CFO’s work differently depending upon what is required for the business. For example, I know one CFO who works two to three days a week in each of two businesses, others provide monthly reporting and accountability sessions. Yet another, calls himself a CFO when in reality he does more work in operations than in finance and probably should be calling himself a consultant Chief Operating Officer (COO).

So how do you know which CFO is best for your business? 

Firstly, you need to identify what you are wanting help with? These questions will start you thinking:

  • Do you need help establishing a budget?
  • Do you need help with your cash flow?
  • Do you want financial reports that are graphical and easy to read?
  • Do you need help understanding the financial reports?
  • Do you need help identifying the key metrics in your business?
  • Do you want help with establishing procedures for your bookkeeping?
  • Do you want advice on your accounting system?
  • Do you want someone to provide advice and support?
  • Do you want someone to help work through important decisions?
  • Do you want face to face meetings or are you happy with virtual meetings?
  • Have you reached a point in your business where the business has plateaued, and you just know you need to get a better handle on the numbers to grow?
  • Do you want help for a short time to get you on track?
  • Do you want monthly accountability? (the best results will be obtained from monthly reporting and monthly meetings).
  • Do you want help with pricing?
  • Do you want help identifying the cost of delivery of your services?
  • Do you want to increase your profit and take-home pay?
  • Do you need to make decisions from time to time but you’re worried you’ll make the wrong decision as you don’t have all the data at your fingertips?

Once you’ve got a good idea on what you think you might be looking for, then you need to look for the best person for the job.

These are my top 10 questions to ask or information to gather from a prospective consulting CFO:

  1. What is their background/experience as a CFO?
  2. What are their qualifications?
  3. How long have they been doing CFO work?
  4. Do they have a preference for any accounting system?
  5. What services do they provide?
  6. Identify whether they customise their services to suit or have a one size fits all approach.
  7. Have they done any research into you and your business before the meeting?
  8. How do they prefer to work?
  9. What access do you have to them outside the planned meetings?
  10. Do you feel a rapport with them and feel they are truly interested in helping you and your business?

At the end of the day, like every other person who is involved with your business, you need to find a person who you like and want to work with. In addition, you need to be able to feel that you can really talk to this person and that they will understand, provide advice and support and be truly interested in helping you to succeed and realise the goals you set for the business. The CFO will be a key member of your advisory team so selecting the best one for you and your business is key.

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  • Kevin

    CFOs must ensure the company has bench strength. Not having the personnel capable of dealing with the unexpected can be a significant setback. Building bench strength doesn’t necessarily involve hiring more people.

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