• Brian Meadows

How Do I Know if it's Time to Hire a CFO?

Updated: Dec 9, 2020

Your company is growing, you’re having a lot of success, but things are getting more complex in the back office. How do you know when it’s time to bring in a Chief Financial Officer? We get a lot of questions around whether our clients can afford to have a CFO, or if they really need it if they have a strong Controller that runs the financials, close process and works with the auditors. Here are some points that can help you determine when and how to hire your first CFO:

Zoom out and look at your management team. How is the current executive team comprised? What’s missing on the team for where the business is headed? (This is similar when looking at a Board of Directors)

How complex is the business? Do we have a lot of compliance areas we need to manage?

What’s our growth strategy?

CFO’s are growth agents. Sometimes that seems strange to think of finance as a growth driver, but CFO’s own your EBITDA. They know how to drive sustainable, profitable growth. In addition, they’re key when looking at business growth to look at markets you should consider, new business lines, how inorganic growth fits in, and how to best put capital into the business to help it expand. It’s great to have a lot of capital inside the business but if you aren’t deploying that capital to support a strategic growth plan, a CFO is a great business partner to have.

Who’s leading the finance function?

CFO’s are leaders. They know how to build teams and drive processes. Having a strong closing process is important to deliver key financial information to make decisions, or to your investors. Investors can be very hesitant to make an investment in your business if you don’t have strong financial leadership. Some require you to have a CFO before they’ll make an investment. Having a strong leader who can provide oversight and direction to your accounting and finance team is important. In today’s environment, there’s a lot of back office technology that get’s utilized and CFO’s are key in helping drive the right business systems for the organization.

Other area’s CFO’s manage:

  • Banking and treasury

  • Commercial Real Estate

  • 401k/investments/employee benefits/compliance

  • IT, security

  • Budgeting, forecasting and financial reporting

  • Strategic Partner to the CEO and executive leadership team

  • Strategy

For a more comprehensive overview of what a CFO brings to the table and how to hire one, connect with us. We work with our clients regularly to help them think about their business, build out roles and job descriptions and help them recruit exceptional finance talent. We’re always happy to provide some advice.

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