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Telltale Signs Your Company May Need A New CFO

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Author: Insider94 Staff 

The New Year is a time of year organizations reflect on the past and plan for the year ahead. As the person in charge of your company’s financial health, a CFO is a vitally important role. But how can you tell if you have a good CFO or if your CFO needs to be replaced?

A great CFO holds two jobs: managing the accounting and finance team and contributing to company strategy. A good CFO does both, a bad CFO can only do one or the other (or sometimes neither!).

Your business deserves better

A good CFO uses savvy financial strategies and data analysis to improve cash flow, grow revenues, and grow profits. A good CFO collaborates with other managers to guide their actions towards the company’s financial goals and uses their leadership to keep financial departments focused on goals and handle bank and investor relationships. Most importantly, when it is time to exit the company, CFOs use their expertise in your business to impress acquirers and execute the sale of your business.

As you assess the strength of your CFO, here are important key performance indicators to ensure this role is a strong contributor to your organization’s future.

CFO’s management effectiveness checklist

  • Are the books closed consistently within 10-15 days of month end? (Best practice is 5 days)
  • Can the CFO explain changes in profitability, costs, inventory, etc.?
  • Does the CFO own failures and misses, or do they blame errors on other people?
  • Does the CFO have a low employee churn rate on their team?
  • Has the CFO innovated changes to the accounting process, forecasting, or budgeting?

CFO’s strategic effectiveness checklist

  • Does the CFO engage with my managers in forecasting, or do they stay siloed within their department?
  • Do I value my CFO’s input on key business decisions? Has their opinion influenced my decisions?
  • Does the CFO analyze data based on business needs, or do they analyze based on their own personal fascinations?
  • Does my CFO have good rapport with our bank, our investors, and our board of directors?
  • Will my CFO be confident presenting to potential buyers of our business?

SeatonHill Offers Fractional, Interim and Project-based CFO Talent.  If you find you need the services of a professional CFO, but you’re unable to bring on a full-time executive, SeatonHill is an excellent alternative. You may be the owner of a small business or startup, ready to take your financial planning to the next level. Or your team may not have the necessary bandwidth to take on higher level financial tasks, such as an audit or a business acquisition. SeatonHill offers ExecutiveCFO services on an interim, fractional or project basis.  Contact Midwest Area Managing Partner, Jay Goethal, at jay.goethal@seatonhill.com for a free consultation.

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