Hiring a CFO, either in-house or outsourced, can be a turning point for your business. CFOs help with everything from strategic planning and risk management to investor relations, financial reporting, and compliance tracking.
The right CFO will play a crucial role in managing your organization’s finances while charting a course toward sustainable growth.
CFOs need to come ready with a proven track record of financial leadership with an expert knack for domain knowledge. This expertise is the key to pushing your business forward and reaching your financial goals.
It’s a key hire, but vetting a CFO candidate can be a tricky endeavor.
Much like filling other mission-critical roles in your organization, you’ll want to ask all the right questions. To help you along the way, here are a few essential questions you should ask a potential CFO to ensure they’re the right fit for your business.
G-Squared Partners serves as a strategic financial advisor to a wide variety of businesses, providing a sophisticated suite of outsourced CFO, accounting, and bookkeeping services. To learn more about how we can support your business, schedule a consultation now.
1. How Can You Contribute to Our Company's Financial Growth and Profitability?
Thinking about how a potential CFO will approach strategic thinking toward initiatives that drive growth and profitability is essential. How will they plan and act on actionable steps? How will they think about the impact of their plans on your bottom line? That’s what this question helps you understand.
2. What Is Your Approach to Financial Planning and Budgeting?
There are many different ways to approach planning and budgeting. Asking this question will help your team understand the particular style of the candidate and provide insight into their ability to predict your future financial needs.
3. How Do You Ensure Accurate and Timely Financial Reporting?
A good CFO is cognizant of the importance of compliance. They’ll also provide stakeholders with a comprehensive and accurate view of your business’s financial health. This question helps your team understand how the candidate might fit into your company’s existing financial and reporting structure and, more importantly, how they’ll improve on it.
4. What Strategies Would You Employ to Manage and Mitigate Financial Risks?
Risk management is an essential skill set for any CFO. A qualified candidate should be able to quickly identify and mitigate risks. They should also have the experience necessary to develop robust risk management strategies that ensure your business’s financial stability. Converting risk into opportunity is no easy task, but the right CFO will be an expert in this arena.
5. Can You Provide Examples of Your Experience in Optimizing Cash Flow Management?
It should come as no surprise that cash flow management is a critical aspect of daily operations. The CFO should be able to provide outstanding financial ability in optimizing cash flows that ensure business continuity while supporting growth. 82% of businesses that fail do so due to poor cash flow management, emphasizing the criticality of this task.
6. How Do You Stay Updated on Changing Financial Regulations and Compliance Requirements?
Financial and compliance regulations are in constant flux. Whether it’s domestic policies or international regulations from bodies like the EU, the CFO should be attuned and experienced in the latest changes and shifts that affect your business. This knowledge is the key to avoiding legal issues and penalties, and this question helps your team understand how proactive the candidate will be in this respect.
7. What Steps Would You Take to Improve Our Company's Financial Efficiency?
The role of a CFO is much more than taking stock of your finances; it’s also about being proactive. Asking this question will help you understand how the candidate might look for ways to improve financial performance and efficiency that helps reduce costs, increase profits, and find new areas for growth.
8. How Would You Assess and Manage the Financial Health of Our Organization?
Your business has goals, and many of those goals will be financial in nature. A good CFO will understand strengths and weaknesses in different financial strategies and offer knowledgeable approaches to managing financial health. Asking this question can provide some insight into how the CFO will act toward reaching your overall business goals.
9. What Is Your Experience with Financial Forecasting and Scenario Planning?
Financial forecasting and scenario planning are all about predicting how your business will perform and make effective future plans based on historical data. A quality CFO will have these skills down to a T. They should exhibit strong expertise in these areas and be a critical player in facing possible future challenges and acting on opportunities.
10. Can You Share Your Track Record in Driving Cost Reduction and Improving Profitability?
As with any other interview process, you’ll want to know all about a potential candidate's past experience in the industry. How have they approached these kinds of complex financial tasks with other businesses? A strong CFO will be able to quickly demonstrate their acumen in taking effective measures that improve your company’s performance and profitability.
11. How Would You Handle Complex Financial Transactions and M&A Activities?
There were an estimated 40,700 M&A deals in 2022 — 17% higher than the pre-pandemic levels of 2019. Understanding how your potential CFO candidate will approach buyouts and mergers is essential in moments of strategic growth or restructuring. Asking this question can help you better assess a candidate's capabilities and experience in managing these types of complex transactions.
12. What Is Your Approach to Managing Relationships with Investors and Financial Stakeholders?
A CFO’s job is much more than managing internal financial operations. The CFO acts as a bridge between the company and its stakeholders and investors. The candidate's ability to manage these relationships is critical in shoring up your company’s reputation and opening up opportunities for funding access.
Find a CFO to Grow Your Business
Searching for the perfect CFO for your company can be challenging, but with the right questions, you can vet your candidates and find the right CFO that helps your business thrive and grow. While having an in-house CFO is a great way to manage complex financial operations, it’s not your only option.
Adding an outsourced CFO to your team can help bridge the gaps between finance and management while guiding your business through every season of growth — and saving you money.
Here at G-Squared Partners, we offer outsourced CFO services that reduce costs, improve processes, and realize efficiencies.
From audit preparation to cash flow management, our expert CFOs are ready to help your team with unparalleled financial insights and expertise. We service a wide range of businesses and can provide custom solutions to meet your team’s every need.
Are you ready to grow your business with outsourced CFO services? Be sure to connect with the team today to schedule a consultation.