Growing a company? Considering hiring a CFO/Finance Manager?
I’ve been recruiting qualified accountants since 2003, and during that time we’ve been through a credit crisis, the Greek crisis, a referendum on Scottish independence, Brexit and a pandemic. Despite that, the economy has grown and some businesses have even thrived.
However, I flag all of those events because in order to navigate the complex world we live in, there comes a point when growing businesses need a full-time Finance Manager or CFO (the distinction being the amount of experience the individual brings). Businesses not only need to have strong financial reporting processes, but managers also need information and a high quality finance professional can transform a company.
Accounting is the language of business
Apart from taking responsibility for a firm’s financial reporting, an experienced Finance Manager will also set budgets, advise of tax matters, ensure the business is compliant, and they will often take part in setting the firm’s financial strategy. In many firms they often adopt a role similar to a Chief Operating Officer with IT, HR, Facilities, and IT also reporting into them. They are very versatile individuals, who can bring logic and structure to team.
There many important things to consider when making a senior finance appointment, and we’ve covered some of these below:
1. Why are you hiring them and do you appreciate the cost?
For a finance hire to succeed they need to understand exactly what’s required of them, and that key stakeholders have bought into the concept of having a CFO. Whilst salaries vary, finance professionals are often not inexpensive hires and they don’t directly generate any revenue. So firms must understand the cost implications.
However, firms must also consider the benefits to their business of really understanding their firm’s key drivers, of being compliant, of bringing in strategy and budgeting expertise.
2. Candidates don’t have to come from the same industry, but experience from a similar industry is helpful
Whilst it can be helpful to hire someone from the same industry, I’d always urge clients to consider individuals from similar, but not the same industry. Why? Well in many cases, candidates from other industries bring a diversity of thinking to issues that can be invaluable.
The most important thing is that the person you hire understands the key drivers of your industry. As an example, they understand that service firms charge for time and advice, but in reality they don’t produce anything. Therefore, procurement experience is important, but not as important as in asset intensive industries.
Being a Chartered Accountant is often seen as the gold standard of qualifications. However, there are of course exceptional accountants who aren’t a Chartered Accountant, and indeed some businesses may not require the skill set a Chartered Accountant brings. As an example, if you want to really get under the bonnet of your business, then some people would prefer to hire a management accountant. For complex industries, it can be helpful if someone obtained their accountancy qualification with first time passes, as this can indicate a strong academic mind.
However, to focus purely on this sometimes ignores that a CFO also needs to be pragmatic, and experience can be more valuable than outstanding academics.
4. People skills
5. A track record of achievement
At Fram we place a great deal of emphasis of not just identifying and attracting talented individuals on our clients’ behalf, but we also spend a great deal of time screening candidates. We want to find people who enhance our clients’ businesses.
Things we are interested in and we recommend hirers ask include:
- What cost savings did you achieve in your last role?
- Can you provide examples of building relationships across the business, which resulted in better performance?
- Explain how you’ve improved financial controls in a previous role
- What examples can you provide of a time when you’ve coached others to high levels of performance
- What do you consider the main drivers of our industry to be?
If you’re ready to take the first step towards hiring a Finance Manager or CFO, then please don’t hesitate to contact us if we can help.
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