Finding a CFO with the right skills, experience and chemistry with the organization’s leaders is critical. A CFO is more than an accountant. He or she is also a strategist. The CFO creates budgets, analyzes financial statements, provides strategic direction, and helps others in the company understand the plethora of data provided by the accounting and finance department.
When Should You Hire a CFO?
As your organization grows beyond its original size and begins to make a larger impact among its constituents, it’s natural to wonder when you should hire a CFO. A few signs that indicate it is time to hire a CFO include:
- The Executive Director, CEO or President is wearing too many hats. As a result, critical financial tasks aren’t getting done on time simply because the leader is too busy to handle them.
- The organization’s finances have grown to be complex, requiring someone in the leadership chair who understands nonprofit accounting.
- The Board of Directors feels a layer of oversight and leadership is needed to manage the accounting needs of the organization.
The right CFO will use their expertise to:
- Bring a strategic, high-level perspective to the organization’s finance and accounting needs.
- Build the organization’s capacity to manage its finances as it grows in size and complexity.
- Reduce excessive workloads in the areas of finance, administration, real estate, technology or legal for the Executive Director (ED) and/or the Chief Operating Officer (COO).
- Balance or supplement the skills of the controller or other finance team members.
- Partner with the ED and COO to make decisions that benefit the organization from a financial perspective.
How to Find “CFO Right”
You may need to allow several weeks or months to search for the right CFO candidate.
The first task is to create a job description outlining the desired characteristics of the CFO. Focus on the necessary core capabilities, strengths, and experiences. It’s imperative that a non-profit CFO has experience with nonprofit financial management. Other core characteristics to look for among candidates include:
- Understands non-profit budget models, contracts, and regulatory requirements
- Knows and demonstrates passion about the organization’s mission
- Produces detailed and precise work
- Exemplifies strong listening and perspective-assessment skills
- Communicates well, in a transparent fashion
- Exercises good judgment in the midst of ambiguity
We mentioned it before, but the right CFO also has a certain chemistry with the leadership team. That’s not as an ambiguous term as you may think. Chemistry is essential to a calm, orderly, and productive relationship with the organization’s top leaders. The better they work together, the more work they can get done.
It’s difficult to assess chemistry, but allow all your top leaders to meet and interact with potential candidates. Give them time to get to know one another during the interview process. Ask them how they feel about each candidate. If you have several equally qualified candidates, you may need to rely upon the team’s judgment about compatibility as the deciding factor.
Can You Afford a CFO? Options
While hiring a full-time CFO is a great solution for many mid-sized and all large non-profit organizations, many are too small to afford or need a full-time CFO. If your organization falls into that category, there are several things you can do to afford to hire a CFO.
One idea is to hire an interim or temporary CFO. No one earns the title of CFO without building an extensive body of knowledge and experience. Bringing someone into the role on an interim or fractional basis gives the Executive Director and the organization immediate access to the many lessons learned over the course of their career, at significant cost savings.
If you’re interested in finding your next CFO or placing an interim CFO in your organization, Welter Consulting can help. Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.