Whether planned or unforeseen, the departure of a CFO can be upending for even the strongest of organizations. There are the immediate needs – ensuring the company’s day-to-day accounting activities and normal business operations are not disrupted. And there are the more complex, long-term objectives – how do we find a candidate that fits our company’s needs, culture and vision for the future?
While it may be unwelcome or inconvenient, the departure of a CFO presents an opportunity to assess your current and future needs for internal financial expertise. With the right approach and resources, this can be a constructive process to ensure your next CFO is the ideal fit for your organization. Where to start? Here are three questions to consider.
- What resources do we need during the transition process? For most companies, the recruitment and selection process for an executive-level hire can take weeks, if not significantly longer. In the meantime, there are employees to manage, accounting activities to complete and relationships with lenders and outside parties to maintain. Now is the time to do an assessment of your immediate needs and put a short-term, tactical plan in place to keep things running smoothly. In addition to getting valuable input from your management team and any employees in your finance department, you may want to reach out to your CPA for additional resources – ranging from bookkeeping assistance to an interim CFO to see you through this transition.
- What are we looking for from our new CFO? Sometimes, the reaction can be “we need to fill this position as soon as possible.” Having advised many of our clients throughout this process, I always emphasize that now is the time to take a fresh look. Consider factors such as business volume, service offerings, operating locations, organizational design, debt structure, accounting complexity, and regulatory and compliance needs . Chances are, what you need today and in the foreseeable future from this position differs vastly from what you needed when you hired your previous CFO. Consider collaborating with your internal management team as well as your CPA to develop a written job description for the ideal candidate.
- How can we recruit and select the right candidate? The recruitment and screening process should be geared toward candidates who best meet the requirements of the written job description based on your company’s identified needs. With his or her knowledge of the technical requirements of the job – as well as your industry and the financial complexity of your business – your CPA can be a valuable resource during the interview stage. Additionally, it’s likely your CPA is well connected to professionals in the industry who may be a great fit for your open position.
While it may bring its fair share of challenges, the departure of a CFO can also represent a significant opportunity for your company. Take your time, tune in to your needs and don’t be reluctant to ask for outside advice and assistance. By doing so, you’re likely to come out of this transition stronger and better positioned for a successful future.
Contributed by John S. Stoner, CPA, CVA, partner and leader of RKL Business Consulting Services Group in the Lancaster office. John provides a wide range of business consulting services, including business valuation, financial analysis, litigation support, merger/acquisition assistance and business succession planning to business clients.