Finding the best people to help out your organisation is a crucial task for leaders, as the choices made can make or break the company's future.
For companies starting out in the business, some resort to hiring fractional chief financial officers to share their expertise in finance, strategic planning, and other CFO-related activities.
Mackey McNeill, founder at business consulting and services firm Mackey, listed out six things to look out for in searching for a good fractional CFO.
1. Data presented as trends and patterns
The best CFOs don't just provide accurate data for your review. They present data in formats that bring meaning to the numbers. Instead of a slew of spreadsheets, they present data in pictures and trending lines so you see how your business is doing.
2. Efficient annual planning that engages your team
If your CFO has one or two meetings with you to learn about your organisation, heads back to their office, and returns with a fully finalized plan for you to implement, they're setting you up to fail.
Business owners have to be invested in their annual plans or they rarely work. CFOs partner with business owners to develop an annual plan that's focused on your goals and dreams. Remember, it's your plan, not their plan.
3. Accurate forecasting
CFOs should not limit you by only providing historical data. We wouldn't drive a car 90 miles an hour looking solely in the rearview mirror, and the same goes for your business. The best CFOs forecast, so you can run scenarios and anticipate how decisions and changes will impact the financial health of your company.
4. Alignment of financial data with your strategic goals
First-rate CFOs are dot connectors. They take the numbers and present them in conjunction with your goals, objectives, and strategic plan. Not every year will be about exponential growth, sometimes you're ramping up for the next big thing. The best CFOs help you remember this. They keep your eye on the prize and they provide historical, present, and future data so you can move forward with confidence.
5. Periodic in-depth analysis
The best CFOs can look at the data and tell when something is off. When that happens, they don't just present the numbers and wait for you to raise an alarm. Top-notch CFOs understand how data can reveal red flags. When they see something that feels off, they roll up their sleeves and dig deeper to understand what's going on and why you may be off track in meeting your financial goals.
6. A consistent reporting cadence
CFOs should hold you accountable for reviewing and understanding the data that drives your business. They meet with you on a set schedule and they prepare you for meetings so you can come in ready to learn and ready to take action. A first-rate CFO treats financial coaching as an ongoing process.
In summation, the best fractional CFOs are invested in your success. Successful financial coaching isn't about a CFO tackling a standalone project or task. It's about a partnership. It's about looking at the short game and the long game.
