The CFO'S Perspective

Hiring a CFO – Do You Need the Tortoise or the Hare?

Aesop’s fable about the race between the tortoise and the hare provides a story to show how a race is not always for the swiftest. In the business world, some companies are very focused on short-term financial results while others are managing for the very long-term time horizon. Some companies are working to improve their operations and financial results in order to sell the business in a few years, while others are building a business for the next generation of owners.

When there is a need to hire a new CFO, the question the CEO and the owners should consider asking is: do I need a tortoise or a hare as my next CFO?

Topics: CFO Hiring Leadership CFO Responsibilities

How Outsourced CFOs Handle Ethical Considerations

As outsourced CFOs we are brought in to assist in a variety of situations across many different types of organizations. Every instance is unique in terms of what kind of financial position they are in, where they are excelling and/or struggling operationally, and what they are looking to get help with across their financial functions. As a result, their expectations can get hazy for the consulting CFO coming into the role. When this unclear view of what a fractional CFO should be doing is combined with financial management activities that are (either unintentionally or purposefully) against best practices or downright unethical, an outsourced CFO can find themselves in a sticky situation.

So, whether you are a consulting CFO looking for advice or a business leader looking for an idea of what to expect from the engagement, we have put together a quick resource to offer some guidance on how external CFOs handle ethical questions and issues.

Topics: CFO CFO Responsibilities

When Should I Hire a Fractional CFO?

If you’re looking to hire a CFO, have you stopped to consider whether you actually need one? Too often companies, especially successful small to mid-sized companies, rightly understand that they need strong financial leadership to maintain their growth and incorrectly conclude that they need to hire a full-time CFO to get it.

Now, as a company comprised entirely of seasoned CFOs and Controllers, we certainly understand the importance of having this kind of strong financial leadership! However, our experience also allows us to understand that executive financial leadership is not one-size-fits-all.

Often, companies that think they need an in-house CFO are better served by utilizing a fractional CFO or Controller instead. This is especially true for businesses below $50M in revenue, because at that level either the primary responsibilities of an in-house CFO are not needed, or they are handled by the business owner/CEO. What this means for your company is you may not need a CFO …at least in the traditional sense of the role!

Topics: CFO CFO Responsibilities

So, You Want to Be a Fractional CFO...?

A new breed of finance professionals is emerging, known as fractional CFOs."

In the ever-evolving world of finance and business, the role of the Chief Financial Officer (CFO) has undergone significant changes. Gone are the days when CFOs were primarily responsible for managing a company's finances in a traditional 9-to-5 role. Today, a new breed of finance professionals is emerging, known as fractional CFOs. These individuals are redefining the traditional CFO role by offering their expertise on a part-time or project basis to multiple companies. If you're considering a career as a fractional CFO, this article will provide insights into the role, the benefits, and what it takes to succeed in this dynamic field.

What Is a Fractional CFO?

A fractional CFO, also known as an interim CFO or part-time CFO, is a financial expert who works with multiple organizations on a contract or project basis. Rather than being a full-time employee of a single company, a fractional CFO offers their financial expertise to multiple clients. This arrangement allows businesses to access high-level financial management and strategic guidance without the cost and commitment of a full-time executive.

Topics: CFO CFO Responsibilities Interim CFO

CFO's Responsibility for Ethics in Business

Whenever I read about a company embroiled in accusations of fraud, my first thought is, "Where was the CFO?" As I've written, risk mitigation is a critical element of the CFOs' responsibilities. What could be riskier than being an officer of a company engaged in fraudulent activities?

Much is written about embezzlement or malfeasance, generally carried out by a single individual with access and need. While these cases can run into significant amounts of money, they are nothing compared to systemic fraud that the entire executive team of a corporation may carry out.

Topics: CFO Responsibilities Integrity

How to Afford Experienced Financial Leadership

Hiring a fractional (part-time) CFO is becoming increasingly popular because this type of employment engagement offers significant cost benefits. Outsourcing their CFO role allows an organization to bring someone in for a fraction of the cost because they do not incur expenses related to benefits, bonuses, payroll taxes, etc. As Michael Newsome explains when talking about utilizing fractional service providers,

“Searching for ways to optimize human capital, while fighting the inefficiencies of talent markets, is an ever-present challenge for businesses in the middle market. The human capital corollary to the engineer’s triangle (fast, cheap, reliable – pick two) seems to be availability, relevant experience, and compensation expectation... An increasingly popular way for businesses to address this issue is using fractional service providers, which have proliferated significantly in their breadth and depth of service offerings in the middle market... A fractional solution can offer a way for a business to access additional capability at a lower total cost than bringing on a full-time hire.”

And while the cost savings are clear, many companies remain resistant to hiring a fractional CFO. Their biggest fear is that doing so requires that they sacrifice on quality in a role that requires the utmost proficiency. Leadership with these types of reservations will typically ask questions like, “Is a part-time CFO as good as a full-time CFO?” or “Can you really trust a fractional CFO to perform at a high level?”

Organizations that question whether a fractional CFO can truly get the job done well for less should consider how a fractional CFO can:

Topics: CFO Hiring CFO Responsibilities

What is a Typical CFO Job Description

A Chief Financial Officer(CFO) is a senior executive role that manages the financial actions of a company. The CFO's duties include tracking cash flow and financial planning as well as analyzing the company's financial strengths and weaknesses and proposing corrective actions.

When a company asks CFO Selections to engage in a search for a CFO, we walk through each company’s specific needs to create a customized job description. The job description for a CFO can vary somewhat depending on the size and industry of the organization, but here is a typical example:

Topics: CFO Responsibilities

The Biggest Financial Shifts of 2023

As companies continue to battle unexpectedly high inflation and economic uncertainty, understanding this year’s prevailing trends across financial forecasting, fintech stacks, procurement, and customer attribution can help them to increase revenue and market share. Our ongoing research and conversations with other c-suite professionals in the industry have revealed several key shifts in these areas that can affect not only how a CFO does their job but also how their organizations develop and execute on strategic plans.

Topics: CFO Responsibilities Change Management Strategy Supply Chain Technology