At CFO Selections, we spend our days inside the financial realities of growing businesses… close enough to see what keeps owners up at night, what they're building toward, and what gets in the way. This series brings those conversations forward: the questions CEOs are wrestling with right now and the decisions that carry real weight. We write from the CFO's seat, but that viewpoint is created with the person sitting across from us.

Daniel Kahneman’s famous book wasn’t about speed. It was about which mode of thinking is running the show: reactive and instinctive, or deliberate and strategic. Business owners, whatever their industry, are running hard: next quarter, next crisis, next decision. The conditions that allow for deliberate, strategic thinking don’t create themselves. That’s the CFO’s real job: building the environment where strategy can take root, innovation can follow, and growth becomes possible. Gary Christianson and Larry Breitbarth do this for companies with very different needs. The way they get there might look different, but what they’re building looks the same.

As executive financial recruiters we work with companies every day who have lost their CFO for a variety of reasons. The CFO may have left to pursue a better opportunity, retired, or made a career change. And in some instances, the CFO may have been shown the door due to subpar performance.

In all honesty, the latter scenario is the least common. Most organizations are hesitant to let their CFO go because of the inherent doubt in the process of doing so. First, there is the big question of how to determine whether your CFO is making the grade. (You certainly do not want to let your CFO go if you cannot be certain that someone else will be able to do the job better!) And, secondly, there is the daunting prospect of needing to find a replacement that is going to be better performer.

But just because it is not very common in practice does not mean it should be. Companies, especially those with owners and CEOs that do not have strong financial acumen themselves, do not typically evaluate their financial leadership as thoroughly as they should. Unfortunately, if your CFO is underperforming, not identifying this in a timely manner or not doing anything about it, can be extremely costly. When your financial leadership is falling short of expectations, strategic planning can fail, affecting revenue and profitability.

According to the 2024 Report to the Nations by the ACFE (Association of Certified Fraud Examiners), organizations lose 5% of their revenue to fraud annually. That equates to a more than $5 trillion loss to fraud globally every year. And while we tend to hope that this kind of thing is happening somewhere else instead of in our backyard, the bulk of this fraud isn’t occurring overseas. In fact, the US and Canada are responsible for 38% of all reported fraud cases worldwide, which gives them the unfortunate distinction of leading the world in fraud.

We’ve known for years now that business fraud is on the rise dramatically across most categories. According to the ACFE, asset misappropriation schemes are the most common but least costly, while financial statement fraud is the least common but most costly. Falling somewhere in the middle of both spectrums are other forms of business fraud like billing schemes, check and payment tampering, and theft of non-cash assets. But there are also far more sophisticated fraud schemes emerging these days as well. A Cybersecurity Dive article from last year revealed a new startling trend – the uptick in financial scams using deepfake technology. While this may sound more like Sci-Fi movie than a business news headline, consider the fact that a recent report by Deloitte speculated that fraud losses may hit $40 billion by 2027 due to generative AI magnifying the risk of banking fraud.

At this point, it isn’t a question of whether your organization will become a target of fraud anymore, but when. Of course, that begs the question: How are you protecting your organization from fraud?

These days the same misconceptions around CFO and Controller roles that have lingered for decades appear to be just as sticky as always. Time and again we hear the misconceptions reiterated that “a CFO only handles finance” and a Controller is “really just an accounting CFO.”

So, we’ve created this resource to set the record straight for business leaders that are looking for financial direction and don’t understand which role their small or mid-market company needs or why it really matters one way or the other.

But before we can talk about how a CFO and Controller are different, we need to explain why it matters at all. It’s important to understand that clarifying the distinctions between CFO and Controller roles isn’t just a matter of semantics. CFOs and Controllers are two distinct roles that serve two distinct functions within a business. Both are important and, when executed well, they will complement each other to aid in strategic management and foster growth. Once you understand that these roles are meant to work together, defining each becomes a critical component organizational alignment.

The list of skills and experience necessary to be a successful nonprofit CFO is long and varied, which can make it seem like a Goldilocks type of situation at first glance. And yet, maybe that isn’t a bad thing! In our line of work, we typically call it something else: balance.

Let’s discuss some of the ways in which this kind of balance is not only helpful for a nonprofit CFO, but critical to their success.

Regardless of size, industry, or location, strong financial leadership is a vital component of any organization’s success. Yet, small and mid-sized companies often forgo hiring a CFO due to budgetary constraints. This is where bringing in a fractional resource can help! An outsourced fractional CFO will perform the same duties as an in-house full-time CFO, but on a more limited time basis.

For those that are not familiar with the term, “fractional leadership” covers anything that is less than full-time. That means a fractional CFO may perform ongoing accounting/finance duties for a set number of hours every week for months or even years while the company grows until it reaches a point where it has enough work to justify the cost of a full-time hire. In this way, a fractional CFO is a great steppingstone as an organization grows or undergoes significant transition. In other situations, a fractional CFO may be brought in to provide short-term business project oversight or to clean up a mess that has resulted from a major accounting issue.

So, let’s look at when a fractional CFO is an absolute must-have.

“My finance leader is leaving! Now what do I do?!”

In some sense, it’s tempting to offer the platitude, “a debit is a debit everywhere we go!” (which is a colloquial way to suggest that all accounting is created equal). However, while there’s some truth to that fact that every organization replacing a leader will need to take some core actions, you don’t need to drill down very far to realize that each business has unique elements to consider as well. Those unique facets will add complexity to how you respond to the reality of a financial leader leaving your organization.

The following guide will help your organization evaluate how ready it is for turnover in a finance leadership role, offer suggestions for how you can be better prepared in case your executive finance leader leaves, and provide key insights into what to do next if the loss of your financial leader happens suddenly.

A business valuation is a critical component of securing a company’s future. Whether it’s done as part of a business sale, merger agreement, litigation proceedings, investment negotiation, succession planning, estate planning, or in compliance with financial regulations, a company valuation gives all included parties reliable information about a business’s financial worth and risk level to aid in strategic decision-making.

While the specifics of the business will clearly determine its calculated value at the conclusion of the process, one person is instrumental in helping the company to arrive at that final number. An experienced CFO plays a key role in any business valuation by leveraging their financial expertise to offer strategic insights along the way and ensure an accurate final assessment of the company’s value.