A Chief Financial Officer (CFO) isn’t a role you take for granted. The role has many moving parts and requires quite a bit of experience and knowledge. This article should help you understand what a CFO is, the main responsibilities, and when is the best time to hire one for your own start-up.
What is a Chief Finance Officer (CFO)?
A Chief Financial Officer or CFO is considered a top-level executive role and the highest financial position. Their main focus is to make sure the company they’re working for is complying with regulations, receiving a strong return on investments, and managing the liquidity ratio/percentage.
They are responsible for tracking cash flow, and financial planning while also analyzing and correcting the company’s financial strengths and weaknesses. Other duties include recording keeping, reporting to stakeholders, financial risk management, and fundraising.
How do I Become a CFO?
Just like any C-suite role, becoming a CFO isn’t an easy path. To start off many CFOs have an educational background in Finance. That can include degrees in accounting and finance. It’s recommended that you also pursue education further than a bachelor’s degree. Quite a few CFOs have MBAs as well as professional certifications (CMA, CPA, CFA, etc.).
It’s equally important to also have the experience to go with your education. As stated previously, being a CFO isn’t easy and you need the experience so you can apply the right strategy in difficult situations. Most CFOs have 10+ years of experience before taking on this type of position.
What Skills Does a Great CFO Need?
The top skills a CFO would need fall under three categories. These categories are leadership, innovation, and strategy. Leadership is pretty self-explanatory. The CFO would need to know how to lead a team. Not only a team but an entire department. The CFO’s leadership style not only has to align with the company but work effectively to unify your staff for a common goal. A factor to consider when looking at leadership would be your communication skills. Make sure your meetings have a purpose and are engaging, if a goal is reached make sure you announce it in a way that everyone can understand and allow feedback that way you can constantly evolve/change.
With innovation, a modern-day CFO can no longer operate based on traditional practices. You have to be able to create a community of creativity both internally and externally. This includes coming up with visionary ways to get the best talent on your team as well as encouraging your current staff to move in innovative ways.
Lastly, you have to think strategically. You have to be able to fully analyze a problem and see the solution from multiple viewpoints. You also have to be able to think ahead. This would be you looking at current trends and forecasting what to expect in the years to come.
When Should I Hire My CFO?
Don’t get me wrong, you do need someone to be in charge of your finances as your fintech scales, but it might not be a CFO. If you are in the beginning stages of your startup, it’s recommended that you have a controller before hiring for a higher position like a CFO. You could look at a controller as a stand-in CFO. A controller would be responsible for the accuracy of the company’s financial accounting and reporting. Due to them tracking business expenses, they can help improve the company’s profitability.
A CFO is someone you should hire once your startup hits a certain point financially. This is due to multiple reasons. One of those reasons being CFOs do not come cheap. According to Salary.com the average salary for a CFO is $416,641. One of the key signs that it’s time to hire a CFO would be when your business is seeing a fast amount of growth.
At Storm2, we are specialists in connecting professional CFO candidates with successful FinTech start-ups and scale-ups across the globe. If you have a senior-level vacancy you’re looking to fill, get in touch. Alternatively, you can read more about our Finance function, here.