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Are You Getting These 5 Things From Your CFO?

Chris Schwalbach  ·  August 14, 2019  ·  5 min

There is a huge difference between a mediocre, “B” level CFO and an outstanding, “A” level CFO. One offers support; the other is a driving force,  propelling you and your company forward.

It all starts with how they view your company. The B-level CFO is a vendor, responding reactively to your requests and needs. The A-level CFO is a partner in your vision, proactively leading the finance strategy for your company. 

Why You Need an A-Level CFO

For you, this means hiring someone who takes ownership of the company’s finances and success like any other executive at your company would. The A-level CFO can lighten your load, allowing you to focus on customers, business and product development. They can help you grow and maintain both speed and velocity in that growth. 

Here are five things the A-CFO will do for you that others will not: 

1.    Provide Accurate, Simple and Timely Reporting

It seems obvious, but many companies falter here, especially with the timely aspect of reporting. It is important, for example, for a Founder to know what type of capital investments are approaching after a large customer payment is received so the cash can be allocated strategically. Simplicity of reporting is also required to provide management with easily digestible data without disrupting their ability to manage. This requires a very deep knowledge of finance and business to be able to deliver effectively. With these reports, the “A” CFO helps you keep an informed focus on both current issues and future plans. 

2.    Deliver Actionable Insight

While the “B” CFO might provide a standard monthly reporting package, the “A” CFO goes further. To help a company execute its strategy, especially when it’s a start-up or high-growth company,  reporting has to provide actionable insight. The “A” CFO will identify areas where you can create processes and policies for improvement. They won’t just offer a look at historical performance, but also of future predicted performance. They see their role as much more than merely providing reporting and handing it off to someone else in the company to act on it but to establish insights and action plans for improvement. 

3.    Act as a Strategic Partner

An “A” CFO will integrate themselves into the strategic process for the company. Whether you have a fractional CFO or a full-time CFO, they are a member of your executive team. 

Moreover, as a member of the executive team, they should be taking ownership — not just ownership of the development of company strategy, but ownership of its execution. This is what you can expect from an “A” CFO.

4.    Integrate Into the Company

The CFO isn’t just a member of the executive team, they are a member of the company team. An “A” CFO understands this and takes the time to integrate into the company. They’ll get to know not just the executives, but others who are working equally hard to propel the company forward. 

5.    Optimize Performance

“A” CFOs are rarely content to rest on their laurels and accept what the company already has in place or has always done. Instead, they’ll help companies identify areas of improvement and partner with the company to drive development in those areas. Most importantly, they will take ownership of optimizing performance.

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The Team Player 

Your “A” CFO is a full member of your team, physically and emotionally invested in your success. Whether they’re fractional or full-time, they will attend team meetings. They’ll offer support and ideas. In a distribution company, they might become involved in conversations with vendors to improve those relationships or improve margins. They might assess your existing corporate liability insurance from a cost and coverage perspective to ascertain if it’s inadequate or too expensive. 

The “B” CFO is more like a vendor. They still add some value through reporting and analytics, but they are not a member of the team. They exist in the background, waiting for a CEO to request specific documents or reports. Then they walk away. They don’t take ownership. 

The “A” CFO gets involved and drives processes to completion on behalf of and for your company. They will work directly with investors on diligence. They will help the CEO negotiate a fundraising round. The “A” CFO will own the process. 

Hire the A-CFO

One primary reason that companies end up with a “B” CFO is that they don’t hire an actual CFO. They often employ a controller or VP-level person to do the job. The hope is that this person can handle CFO-level work . . . and that seldom works out.  

The CFO skillset comes with experience, knowledge and even connections. The reverse of this is that some companies will use their CFOs to do accounting or controller work. That is usually a waste of both time and money. 

The AVL model works exceptionally well. Companies get an experienced full-stack CFO, a great controller and an extremely experienced accountant to come in and do the work at their respective A-levels for a similar price or less.

How to Develop an “A” CFO

Whether your CFO is fractional or full-time, treat them as a member of the team. Ensure you include them in team updates, meetings and events. Introduce them to the people in the office. Invite them to company parties.

Communicate clearly with your CFO and expect the same clarity from them. Occasionally, we see companies who only leverage the CFO when financial reports are needed, or when it’s time to close the books. Your CFO should be involved holistically to understand what is going on. 

If there are client issues, for example, what is the impact on your finances? This is the kind of strategic question CFOs can answer if they a member of your team. 

Involving your CFO in the company ensures they can offer you strategic support and advice. However, it also engages your CFO in your company and the company’s success. 

This is the definition of the “A” CFO. They are a strategic partner for you and the rest of the executive team, and they take ownership of the process and ownership in your success.