What are the Qualifications and Skills You Should Look for in Hiring a CFO?

Whether your business is a startup or a financial company, you require a strong and agile financial team with a highly competent leader. In large businesses, hiring a CFO is mandatory, but in small and mid-sized businesses, it is up to the business owners or partners to identify the need for a CFO and hire one. Finding out all about the qualifications of CFOs and key skills is necessary to find the right fit CFO for their company.

Know the Difference

The CFO Position for Large Listed Companies

The CFO position for large listed companies needs to follow the regulatory and industry guidelines. There are many activities and decisions which need the approval of a CFO and the board.

CFO qualifications and skills to be considered for a large listed company, including extensive financial, accounting, legal, and regulatory compliance expertise and experiences. The CFO is accountable for presenting the financial statements truly and fairly to be subsequently audited by the statutory auditors of the company. There is no fixed regulatory rules about the qualifications of CFOs for large, listed companies.

The CFO Position in Startups and Mid-Sized Companies

The CFO of a startup, small-sized, or mid-sized company is a wearer of many hats. Smaller companies cannot afford to have several financial leaders such as a CFO along with a VP of finance and a finance director. Therefore a single top leader has to manage the supervision and direction of all financial aspects of the company.

If you are a startup or mid-sized organization looking for a CFO, ensure that the CFO has great leadership abilities and strong business knowledge along with financial expertise. A startup CFO needs to be a people person and lead from the front.

This leads to the questions about “CFO required skills” and qualifications of CFO frequently asked by business owners who feel the need to hire a CFO.

What to Look For When Hiring a CFO for Startups and Mid-Sized Companies?

1. Qualifications

CFO qualifications and skills are important parameters of the hiring process. Usually, CFOs have an educational background in finance along with degrees or certifications in business, management, or economics. Generally, CFOs are chartered, accountants. A chartered accountant is an international accounting designation granted to accounting professionals in countries around the world. The equivalent to the CA designation in the US is a certified public accountant.

But apart from this designation or title, a CFO needs tremendous experience and expertise in financially assessing various business moves, such as takeovers, new market entry, new operations launches, new projects and programs, etc. The CFO needs to be conversant with the latest technologies and in overseeing financial data analytics.

2. Strategic Financial Planning Knowledge and Experience

One of the key CFO required skills is he or she needs to be a driver of strategic thinking and financial planning. And where possible, they should possess a demonstrable track record of creating value for your company via financial decisions. Strategic financial planning is key to overcoming various financial risks that affect a company’s profitability and continuity.

3. Forecasting and Budgeting Knowledge and Experience

Budgeting, planning, and forecasting are three-step processes for identifying and detailing an organization’s short-term and long-term financial goals. A CFO usually manages this process with other teams there to assist them.

Hence, while hiring a CFO for your company, you should ensure that they have forecasting and budgeting skills. The CFO should come to the interview prepared to demonstrate their forecasting and budgeting skills. While hiring a CFO, ensure that they can prepare the company’s financial direction outlines. In this manner, you can create a model of expectations.

4. Financial Risk Management and Compliance Knowledge and Experience

Nowadays, companies have to comply with various types of financial regulations. Even a single mistake leading to a penalty and legal trouble could adversely affect a company’s reputation. Startups and SME companies need a CFO who is adept in the nuances of financial risk management and compliance.

Mitigating and managing financial risks are necessary for the smooth functioning of your company. A large part of your CFO’s job is to assess and manage risks. They should be adept at deploying various measures to mitigate lingering financial risks.

5. Knowledge and Experience in Financial and Accounting Technologies

The business environment only gets more competitive year over year. With everything going online, connected, centralized, or on Cloud, financial, technological platforms and systems are must-haves for modern-day CFOs. Expertise in overseeing digitalized financial operations and improving them is one of the essential CFO required skills nowadays.

The CFO you’re hiring should have great knowledge of financial and accounting technologies. Furthermore, they should know how to integrate reports into your company’s ERP system. All these skills make a CFO ideal for today’s competitive business environment.

6. Expertise – Your Industry and Business Types

No doubt, each industry is different. So a CFO working with a totally different industry domain cannot be ideal for your company’s industry niche. Hence, it is ideal to hire a CFO with industry-specific knowledge about your operations.

By knowing about your industry domain, the CFO can implement highly accurate financial decisions to help you amass profit. Furthermore, with industry-related knowledge, the CFO can help your company avoid financial distress with strategic planning.

7. Ability to Assess Funding and Investor Plans

A CFO assesses the funding needs for different company initiatives and offers sound advice. He or she should be able to analyze investor demands and make plans to transmit complicated financial information in an easy-to-understand manner. It would help if you appointed a CFO who understands maintaining good investor relations. The right investments can help your company reach the pinnacle of growth. The CFO should also be able to assess funding sources so that you comply with the latest regulations.

8. Expertise in Improving Cash Flow and Revenue Management

The CFO should possess expertise in improving your company’s cash flow and revenue. Cash flow can be negative owing to the inability of your financial team to handle various aspects. A competent CFO can help improve your organization’s cash flow to attain positive growth. Investing in the right revenue management techniques to develop your company is crucial. A skilled CFO can help you achieve that. Hence, always hire a CFO with these abilities, which can take your company forward.

Conclusion

If your company is planning various high-risk initiatives or investing in capital-intensive projects or operations, hiring CFO services saves you a lot of trouble. Many international investors and clients might want to partner with a company with a qualified CFO to ensure the stability and risk management of their projects.

Hire a CFO through the services of CFO headhunters. These are professionals who have helped numerous companies find the right CFO and are well conversant with all the procedures of CFO recruitment.

Alliance International

Alliance International is a global recruitment company offering C-Level recruitment services to companies worldwide. We have 12+ years of experience in C-suite executive search and recruitment. Our industry-focused CFO headhunters are always ready to offer 100% assistance, from guidance and consultation to end-to-end recruitment support. Let us know about your CFO recruitment needs.