Strong financial management is something any company needs to survive during hardships, thrive when all business goals are met, and continue improving forward.
That is why companies serious about standing out in the market invest their time and effort in hiring a competent chief financial officer (CFO).
Based on the “The CFO of the Future” report by the Institute of Management Accountants (IMA) and Association of Chartered Certified Accountants (ACCA), the importance of the CFOs is only likely to increase over the upcoming 3-5 years.
It only seems natural as with the help of the CFO, businesses can build the bridge between the company’s founders, shareholders, and customers.
To learn HOW, continue reading the article, as we’ll share the key reasons why hiring a competent CFO is key for nearly any business out there.
Offering the right financial model for your business strategy and goals
Let’s start from the basics, and something too many companies overlook.
To run a business effectively, you need to apply the right financial model. CFO is someone who can help you do that by analyzing key financial processes such as budgeting, strategic planning, and more.
With the right financial model, setting up a plan for the business’s future becomes smoother.
ROI of hiring a CFO is crucial
Investing time and money in hiring a highly qualified CFO is one of the best things you can do for your business.
Even if you are a startup that has just started, recruiting a CFO can play a significant role in the further development of your business – be it finding investors, dealing with budgeting and accounting, or setting tangible and ambitious goals for further growth.
Hence, the ROI of hiring a CFO is well worth it – both for newcomers and businesses that have been in the market for a while.
More attention and quality to the financial side of the business
Once a company hires a person dedicated specifically to managing everything-finance, the quality increases almost immediately.
It is so because now the company has someone who can pay more attention to accounting and other financial matters to make them as effective as possible.
Moreover, a highly competent CFO with leadership qualities can also gather up a strong financial team and inspire it to move forward.
Ensuring an overall better workflow in the company
For a business to survive and thrive, smooth workflow is key.
What CFOs in the company do, take responsibility for ensuring that the financial side of the business runs properly, which in turn fosters the improvement of any other part of the company.
Some of the main responsibilities CFO takes to improve the workflow at the company include:
- Supporting the CEO and other top leaders in the company.
- Providing data-based insights that can improve the company’s direction.
- Making sure revenue is collected on time, and the business is funded properly.
- Building relationships with financial partners that can foster the company’s growth. That includes communicating with investors, top players in the market, and the most valuable partners.
Finding M&A opportunities
Merger or acquisition is something that forces businesses to reconsider their potential and business opportunities. To do it right, a CFO role is key. The CFO can carefully analyze all the necessary financial documentation, interpret it, and tailor it to the business goals so that M&A would be a success.
What many companies do, is hire an external financial advisor to help them out during the process.
However, having a CFO in-house makes the procedure much easier and leaves less room for mistakes as CFO understands both the financial and business model of the company well.
Spotting opportunities for automation
These days nearly any field of business is all about automation. The financial part is no exception.
With a CFO in the company, a business can accelerate accounting and other financial operations much quicker.
TOP qualities you should consider when hiring a CFO
Now that we’ve learned some of the key reasons hiring a CFO is a worthy investment, let’s look at what you should look for when recruiting.
- Professional skills and experience. Learn what their previous positions were and, most importantly, what results they could achieve while in their last job. Learning as much as possible about their professional background will help you get a better idea of the person who can help your business succeed.
- Strategic mindset. An ability to make strategic and calculated decisions is something you should expect your potential CFO to have. This quality is key to help your company thrive.
- Collaboration. As CFO will work closely with the financial team in the company, CEO, investors, and potential partners, it is vital to hire a person who is ready to communicate, collaborate and act as a team player in the company.
- Innovation. Living in the age where digital innovations move every business forward, you have to hire a CFO willing to constantly learn, innovate and adopt digital solutions as quickly as possible.
Aside from the mentioned qualities, consider your company’s values and recruit the person accordingly.
The idea is to hire someone who’ll join your business long-term and work closely with you to achieve all the goals you may have.
Altogether, a CFO is a key position for any company that is serious about development.
With a CFO, workflow, accountability, and automation become easier and more achievable.
The key thing here is recruiting a person with skills, experience, a leadership mindset, and the willingness to collaborate with the other team members.