When And Why Should You Hire a CFO in India? What to Look For?

CFOs help in reducing financial risks and managing them in the most efficient manner. Here’s a guide to help you significantly enhance your CFO hiring decision. Find tips and suggestions provided by expert CFO headhunters. Also, for a CFO to be successful, he or she needs brilliant staff. Investing in CFO staffing is equally important when you plan to recruit a CFO.

The chief financial officer, CFO, is responsible for ensuring that the company’s strategy is designed and implemented with a high level of operational resilience and efficiency.

In India, a Chief Financial Officer is classified as Key Management Personnel, KMP, under section 203 of the Companies Act, 2013. Companies must appoint a Chief Financial Officer for the reasons listed below –

  • Each firm on the list
  • Any other public corporation with a paid-up share capital of at least ten crore rupees.

According to the interpretation, a Chief Financial Officer is not necessary to be hired if the organization does not come under the aforementioned categories or ambit. However, a corporation in India might choose to voluntarily comply with this requirement.

According to Wikipedia, “The chief financial officer is the officer of a company that has primary responsibility for managing the company’s finances, including financial planning, management of financial risks, record-keeping, and financial reporting.”

A company’s Chief Financial Officer, CFO, is responsible for all aspects of the company’s finances, including risk management, financial planning, record-keeping, and financial reporting. In some industries, the CFO also looks into the working of data analysis.

CFOs use their expertise and awareness of the company’s financial status to influence the success of the organizations in which they operate.

When should your company start considering CFO recruitment? Here are some pointers provided by experts from top CFO recruitment agencies.

When Should You Hire A CFO For Your Company In India?

1) Financial Risk Management For Inorganic Business Growth Moves Worth Over Million Dollars

The growth that occurs as a result of the acquisition of other firms or the establishment of additional sites is referred to as inorganic growth. Expanding your product range or the kind of services you provide or recruiting more personnel may be necessary. In this endeavor, the CEO might enlist the help of a CFO as a strategic partner.

CFOs are an excellent resource to have when contemplating a major change in your organization since they are experts at assessing business models for integrity and profitability.

2) Financial Risk Management For Business Transformation Move Worth Millions Of Dollars

You have been successfully running your business for some time, and now it is time to take it to the next level. Without the help of the CFO, the task of transforming your company can be a bit challenging. The CFO of the company makes strategic plans to take the business forward.

The CFO is required to report to the CEO of the company of every plan. The Controller’s group is in charge of reporting, which takes up a lot of the CFO’s work.

The company’s financial professionals gather together and create all of the company’s financial reports for shareholders, workers, lenders, governments, and regulatory authorities. The reporting team’s responsibility is to ensure that all reports are completed on time and are correct.

3) Financial, Tax, and Regulatory Compliance Of Companies With Revenues Exceeding Millions Of Dollars

A CFO’s strategic emphasis includes ensuring that their firms have a good return on investment, ROI. Return on investment, ROI is a metric that determines the chance of getting a profit and the quantity of that profit. It considers an investment’s profit or loss as a proportion of its cost as a ratio.

A CFO’s most essential function is to assist the organization in achieving its financial objectives like filing taxes and earning profit from the revenues.

A company’s risk-adjusted return on assets and return on capital may be maximized with the assistance of a CFO. A CFO must be able to recognize the company’s main areas and convert them into monetary elements.

Because Return on Investment is a simple metric that does not report for all variables such as net present value, CFOs utilize context to determine if a project will generate a strong enough return on investment to justify the investment.

4) Overseeing Financial Management of Capital-Intensive Operations:

The primary responsibility of a CFO is to manage a company’s cash inflows and outflows.

Liquidity refers to a company’s capacity to pay down short-term commitments that are dues in less than a year, using easily available money. Liquidity is generally stated as the ratio or a proportion of the company’s liabilities versus its assets.

The liquidity department ensures that the company’s financial needs are met and that there is sufficient cash flow. Treasury departments are usually on the hunt for the company’s cash. The treasury division is adept at managing the company’s cash and working capital, including accounts payable, receivable, and inventories. The CFO has the expertise to direct and improve the functioning of these departments.

5) For Global Expansion Plans Involving Major Financial And Risk Management

If your company in India is looking forward to expanding its business globally, finance management is bound to become a problem. The task of a CFO is to overcome this problem and reduce every risk that can arise in the financing.

A CFO can set up and oversee accounting systems with internal controls, making audits considerably more affordable and manageable. When the need arises, your CFO may take charge of the audit, lowering your worry and ensuring that the audit does not disrupt your everyday operations.

What to Look For When Hiring A CFO in India

Here are suggestions and tips provided by experts from global CFO recruitment agencies about how to assess, screen and select the best candidates for your vacant CFO position.

Not Just CPA or Chartered Accountant Degree – Financial Management Experience and Qualifications Matter

Even though it is not necessary for the candidate of a CFO to have a bachelor’s degree in accounting, finance, or business administration or a master’s degree in business administration, these degrees help in making an excellent CFO.

The Chief Financing Officer can also have a Chartered accountant certification, CA(Chartered Accountant), CMA(Certified Management Accountant), or CPA(Certified Public Accountant).

Experience in A Senior Financial Management Position of 15+ Years

Having experience in a field when you are looking for a job in that field is an added bonus, but for the roles of COO, and CFO, having experience is a necessity in India.

The degree does not make you qualified for the Chief Financing Officer role, and you should have experience in a senior financial management position for more than 15 years.

Relevant Experience in Organic or Inorganic Business Expansion Financial Planning and Risk Management

If your company plans to expand through takeovers and acquisitions, then you need a CFO who has experience in planning such moves with perfection. Your future CFO needs to have experience in assessing risks from financial and market perspectives.

If your company plans organic business growth, then expert CFO headhunters suggest your future CFO should have a proven track record in financial risk assessment, financial planning and management of market expansion moves in your industry.

Knowledge and Competency in Financial Modeling and Analytics

With keeping a record of all the financial happenings of the company, the CFO also analyses the data. When hiring a CFO for a company in India, make sure that they have a good grasp of financial modeling and data analysis. These qualities in the CFO are a sure shot of making a company successful.

Expertise and Track Record in Financial and Tax Regulatory Compliance

For a company to be run smoothly, compliance with tax regulation is a must. The CEO might not have the expanded knowledge of these issues, which is why CFO staffing is hired.

When you are hiring a candidate for the position of chief financing officer, ask them about their expertise and track record in financial and tax regulation. All relevant tax documents should be coordinated and produced by the CFOs.

Extensive Collaboration Skills

Being collaborative is very necessary for the candidates who are applying for the role of CFO. Without collaboration between the CFO and other important people of the company, many problems can occur. The relationship between the CFO and the board of directors and with everyone working in the company should be transparent.

Alliance International

Alliance International offers C-level recruitment services to companies across 50+ industry segments.

We are among the CFO recruitment agencies that specialize in offering a broad spectrum of executive recruitment services, meeting every kind of requirement from market mapping for specific talent, compensation benchmarking, best-match CFO candidate search, passive candidate outreach and selection.

Alliance International has a reputation for offering high-quality, custom-tailored CFO staffing solutions. Our CFO headhunters help companies to find the best-match CFO for their organization as well as the staff for the CFO office.

Get in touch with us for excellent CFO headhunting and CFO staffing services!