Expert Advice for Medium and Midsize Businesses

How to Find a Great CFO for Your SMB

Ken Judd
Chief Financial Officer
One of the toughest challenges for any small-to-medium business (SMB) is finding the right talent, especially in finance. As I noted in a previous column, there is a severe shortage of finance talent for SMBs.

One of the biggest reasons that SMBs have trouble hanging onto their finance talent is the workload. While it’s true that smaller, private companies are not subject to all the same regulations as larger, publicly-traded enterprises, they should still follow finance best practices if they want to attract funding and inspire investor confidence.

Unfortunately, many SMBs are bogged down with spreadsheets, manual work, and paper-based processes. They might have a small accounting staff of 3 to 4 people, who must manage all finances across every line of business. This entails reconciling numbers across LOBs (typically from dozens of spreadsheets), making sure that everything adds up, and ensuring that the formula in one spreadsheet matches the formula in all the others.

This is time-consuming, tedious work—and during particularly busy periods, like the monthly close, it can easily result in many late nights away from home and family. Finance professionals in such situations quickly burn out, and end up leaving their jobs for bigger companies with more staff and (somewhat) shorter hours.

Greater Efficiency Through Automation

This is where automation plays a key role in helping you hang onto your finance talent. Finance technology, particularly in the cloud, helps you automate manual tasks like data gathering, reconciliations, compliance and more. Emerging technologies such as artificial intelligence (AI) and machine learning even provide automated recommendations on how to improve finance efficiency, such as how to optimize payment terms.

The more you can automate your finance back office, the more you can remove the burden of overwork from your finance talent, making your SMB an attractive career opportunity for an ambitious CFO.

Since technology plays a key role in any automation effort, look for a finance leader who has some experience with IT implementation projects. Ambitious finance professionals are getting involved with implementing ERP cloud systems, analytics, and even supply chain, because they know that they’ll be expected to make these lines of business as efficient, agile, and profitable as possible.

Better Information to Predict the Future

Finance is all about numbers, but today’s finance teams are also looking for professionals with advanced analytical skills—the data scientist, the big data analyst, the statistician.

Finance teams that are agile are those that can synthesize information from a number of different sources across the company—whether that’s sales, marketing, customer service, or product—and use that information to develop and measure non-traditional key performance indicators.

The companies that measure such KPIs are more likely to report increased revenues and increased profitability. When undertaking your CFO search, look for a finance leader with experience measuring non-traditional KPIs—and who can build a finance bench with deep analytical skills.

More Influence to Drive Business Outcomes

In a large company, finance professionals get the opportunity to work with many different clients, colleagues, and partners. They develop their “soft skills” with project- and people-management experience. Large accounting firms are great places to find aspiring CFOs who have honed these skills over several years.

The ability to influence and lead the business requires partnering skills, people skills, cross-functional skills, rapid decision-making, and strategic thinking. A finance director or VP with a solid decade of experience at a larger company might make an ideal candidate for CFO of your SMB.

And SMBs do have something to offer the ambitious finance professional; in a big company, there are only so many high-level jobs. 99.9 percent of the workforce will never become the CFO of a Fortune 500 business. SMBs can offer a career opportunity—to lead the finance team of a fast-growing company—that bigger organizations can’t match.

To attract great leaders, you need to be smart about compensation. Your CFO might never earn as much as the CFO of Apple or Walmart, but you should be prepared to offer more than a finance director or VP would earn in a larger firm. Otherwise, you won’t even be part of the conversation.

And of course, a stake in your company is always a great enticement—especially if your company is growing fast and eyeing a possible IPO.

A strong CFO is an asset to any SMB, and is often crucial to raising funding and investment; your financial backers will want reassurances that their money is well managed. Automate your finance function, build your analytics bench, and develop strong team-building skills, and you’ll be well on your way to finding (and keeping) a great CFO who inspires trust and transparency among potential investors.

Discover 5 ways to improve finance function effectiveness and help your SMB "GO and Grow."

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