How can a company determine the right fit for its CFO needs in the short term?
The first thing a company should look at is the person’s background. Does he or she have experience in this area? How does that person relate with other individuals? What areas of expertise and what industries have they participated in? Do they have the expertise needed to be able to fulfill the company’s needs?
Then once you bring that person on board, you have to work to quickly integrate him or her into the company.
You need to let that person know what you need on a monthly basis and communicate what is expected with regard to filling that position. Communicate what you need from that person in terms of weekly or monthly reporting data. Give them an understanding of what you anticipate their role is and what they need to do to keep the company functioning at the same level that it was previously. Have them review the current documents that are in place, and in the best cases, the former CFO has left a good path to follow that shows how he or she maintained records and closed the books on a monthly basis.
You need to understand the difficult situation that the person is in and be willing to assist in any way that you can. Then you need that person to get in there and get their hands dirty.
How can hiring a temporary CFO benefit your company?
Most companies, when they outsource for a short period of time, instruct the person to keep everything status quo. They don’t want someone coming in and changing things, only to have a new CFO come in a few months later and change things again.
But the temporary CFO may see opportunities where the company could make changes to improve its operations. If a CEO is open to hearing those suggestions, the company could benefit by implementing processes the former — and future — CFO might not have thought of.
In addition, a company could get assistance from the temporary CFO in its search for a new executive. That person could review resumes, sit in on interviews and ask questions to help determine how qualified potential CFOs are. That temporary person, who has become familiar with your processes, could also help train your new CFO.
In addition, that temporary CFO can benefit your company even after he or she has left. For example, I once worked as a temporary CFO at a company, and nine months after I left, the new CFO and the company were going through an acquisition and needed assistance. The first person they thought of was me because I was so familiar with the company and its operations, and I was able to assist them with bringing the new acquired entity on board.
Many business owners may not be aware these services are available, but nearly every company can benefit by hiring a temporary CFO while they search for a replacement executive.
Companies should do their homework well in advance and research accounting firms to find one that offers outsourced services to fit their needs. This way, they can be prepared if a problem arises and they find themselves in immediate need of an interim controller or CFO.
Steve Schmidt, CPA, is an associate director in assurance services at SS&G. Reach him at [email protected].
