Advantages of a Great CFO: Thinking of Your Business with the Right Lens

By Jim Bourdon, CEO & Founder, Accounting Management Solutions

Think your company is too small to have a CFO? Maybe hiring a CFO is part of your vision of the “future state” once you’ve reached a certain size? The truth is, the right CFO can provide a high level of strategic direction to help a growing organization see itself with the right lens and reach its full potential. More than a controller, a CFO should be more strategic in nature and understands the business drivers and works hand in hand with the CEO to carefully navigate the opportunities and the risks of taking your business to the next level. Here are a few instances when a CFO’s acumen comes in handy:

1. Implementing financial controls. In addition to managing cash flow and overhead, every organization needs the right level of governance in place to protect against fraud. An experienced CFO can help identify and mitigate your exposure to potential risks by establishing and enforcing appropriate financial controls. In addition, a CFO will manage regular audit processes to ensure compliance and oversight no matter how large you become.
2. Negotiating with suppliers and customers. You should count on your CFO to help your company achieve the most advantageous rates, terms and conditions, credit lines and payment options for both incoming and outgoing revenues. This will ensure that you have the cash flows available to keep operations running smoothly as you expand your business.
3. Establishing relationships with lending institutions. When capital is required, a strong CFO will have access to multiple sources of investors or lending institutions that can provide the lines of credit or working capital you need to expand.
4. Managing organizational changes. Mergers, acquisitions, and IPOs are all major ownership changes that your company may want to consider as part of your growth strategy. A CFO with the right background can provide the appropriate quantitative analysis and strategic direction to lead your organization smoothly through the process.

For smaller companies, it may not make sense to have a full time CFO so there are options to enlist the support of a part-time or as needed CFO.

If you do begin a search for a CFO, it is good to look for a candidate with the right industry experience, communication skills, leadership style and cultural fit. Most importantly, you need a candidate who understands and fully embraces the “future state” you envision and knows how to take you there.