5 Qualities to Look for When Choosing an Outsourced CFO

Posted by Joseph Himy

Hiring an outsourced CFO is a great choice for a startup or small business that needs financial expertise but isn’t ready to hire or can’t yet afford a full-time CFO. When you choose to hire an outsourced CFO, you’re not committing to a full-time employee who may not be the right fit; you’re committing to a financial expert who can work as little or as much as you want and who comes with a broad range of financial knowledge. More importantly, you’re making a solid investment toward the success of your company.

But what should you look for in an outsourced CFO? Are they all the same? Absolutely not! They’re not all the same and there are certain qualities that separate the good from the excellent. The team at CFO Squad is going to cover the essentials of what you need to look for when hiring an outsourced CFO.

Here are 5 qualities to look for when choosing an outsourced CFO:

Great communication skills

You may be surprised to see this listed as number one; CFOs are typically known for their financial know-how, not their communication skills. However, because you’re hiring an outsourced CFO who doesn’t know you and who won’t be working full-time, it’s essential that they’re able to communicate clearly and precisely so that you’re all on the same page. Communication includes understanding what’s expected of them, setting expectations, reporting on tasks, and explaining to others what steps need to be taken for the company to move forward.

Analytical ability

A great outsourced CFO isn’t just someone who can report on this past quarter’s numbers; it’s someone who can analyze the numbers and give advice and predictions based on them. Accounting software can take care of generating reports, but a CFO is the person you’ll rely on to translate those reports into actionable plans for success. This is especially true for startups that may not always have stable financial footing.

Detailed-oriented but sees the big picture

It’s a lot to ask, but it’s also part of the job description—your outsourced CFO should be meticulous about details and someone who can see the big picture. Details include being on top of income, expenses, cash flow, and more… all of that is very important. But it’s equally important to choose someone who is forward thinking, who can take these details and create a large-scale financial goal, someone who can create a plan for your startup to become an established business.

Leadership

When you have a startup or small business, you want an outsourced CFO who has outstanding leadership qualities. While you would want that in any CFO, with an outsourced CFO, it’s even more important. This is because they typically work part time, don’t know your team the way you do, and don’t put in the same kinds of hours that other C-suite members do. Therefore, you want someone who your employees can respect even though they’re not always there, someone with the knowledge and experience to set tasks and goals that team members can get behind. Remember, a CFO is part of the C-suite, so you’re not just looking for a numbers guy, but a numbers leader.

GAAP expertise

This may go without saying, but if your excellent communicator, analytical thinker, big-picture seer, and leader doesn’t know the basics, then you’re in trouble. Which is why your outsourced CFO should be well-versed in GAAP, Generally Accepted Accounting Principles, the common set of accounting and regulatory requirements and procedures in the United States. If you ever want to raise capital or take your company public, adhering to GAAP is a must.

Benefits of hiring an outsourced CFO

Now that you know what to look for in an outsourced CFO, you can enjoy the many benefits that come along with hiring one. These include:

  • Not having to pay a full-time salary + benefits of an in-house CFO
  • Setting the hours that you need
  • Getting an outsider’s perspective on business operations
  • Hiring someone who’s been vetted by an advisory such as CFO Squad

Then, of course, there’s the main benefit, which is having someone on your team who can steer your company toward financial success. Please reach out to us here at The CFO Squad if you have any questions about what we do and how we might be able to help you make the important decisions regarding your organization’s financial future. We can be reached at: [email protected] or by phone at +1 (845) 613.3399

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