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The search for the perfect person to lead your company’s accounting and finances can be difficult, and this is especially true in the current tight labor market. Many companies tend to promote from within the company. Still, you might consider an external candidate who may offer innovative ideas, a fresh perspective, and the critical skills that will take your financial department to the next level. Here are four characteristics that should be at the top of your list.
- Do they have both leadership and financial strategy experience?
The finance and accounting department provides vital data and feedback about the current performance of your company as well as future forecasts. The financial information lays the groundwork that will allow the rest of the management team to make critical business decisions.
The CFO must provide accurate and relevant financial data to other departments in a timely manner. Departments such as operations, sales, information technology, and supply chain logistics — need that financial data to improve how the business operates. It is important to remember that your CFO must also be able to create cross-departmental support for major financial initiatives. Companies that operate overseas or plan international expansion should look for candidates that also have experience managing and reporting in a global context.
- Does your candidate have a command of the basics?
Your new CFO must have a working knowledge of industry-wide, basic finance, and accounting fundamentals. These fundamentals should include
- U.S. Generally Accepted Accounting Principles (GAAP) and, if applicable, international accounting standards,
- familiarity with Federal and state tax law,
- financial planning
- financial benchmarking
Possible candidates should be familiar with the significant changes that have affected accounting rules and tax law. These latest changes include the business provisions of the Tax Cuts and Jobs Act. Candidates should also understand the impact of updated accounting standards on reporting revenue, leases, and credit losses. Finally, it is helpful to find a candidate that has experience with cost-cutting programs as well as managerial accounting.
- Do they have previous employment in public accounting?
Many CFOs started their careers in public accounting. Such experience is an especially helpful trait as they will be familiar with a broad range of accounting and tax projects in various industries. This experience becomes invaluable as candidates look for leadership roles in the private sector. Former xPAs understand the auditing process works and can implement procedures to support that process within your organization. Public accounting also provides a wide range of experience and interaction with the best (and worst) business practices in the real world. This insight can help your company avoid potential pitfalls and recognize great opportunities.
- Does your candidate have forensic and technology skills?
CFOs sometimes need a forensic perspective in their business. They may be required to oversee a fraud investigation or repair a data breach. It may also be necessary to evaluate compliance with government regulations.
Additionally, the continuous threat of cyberattacks has made technology skills a necessity for CFOs. Potential candidates should know how to protect the financial data of the company. This knowledge should include securing sensitive data, including customer credit card numbers, financial data, and company assets. Candidates also must have a working knowledge of accounting systems and security procedures both in the cloud and on internal servers.
As your business evolves, so too must the role of the CFO. JLK Rosenberger can help you evaluate candidates to find the right mix of skills and experience for your finance and accounting department. Call us at 949-860-9891 or click here to contact us. We look forward to hearing from you.