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How to Write the Perfect Fractional CFO Job Description

Writing a job description for a Fractional CFO starts with understanding your needs, helping ensure an effective engagement.

Writing a job description for a Fractional CFO starts with understanding your needs, helping ensure an effective engagement.

When hiring a fractional CFO, you want to make sure that you are investing your money in the best candidate available. Now, a big part of this starts with writing the perfect job description and attracting the right talent. But, another part is about setting up your fractional hire for success. After all, the best candidate in the world will flop if they have the deck stacked against them. 

The good news is that if you find the right candidate and get them off on the right foot, you can potentially create an ally with whom you can build a healthy and flourishing working relationship. What’s more, you will have a strategic partner who can help you navigate the critical life stages of your company, including selling it.

Yet before getting ahead of ourselves, let’s start with finding you the perfect fractional CFO for your business today.

How to write a fractional CFO job description

As a CEO/ business owner, you will probably bring in a fractional CFO for one of two reasons:

  1. You have a financial problem of sorts, but you can’t put your finger on the exact issue. As a result, you need an experienced executive to help you identify and resolve the problem.
  2. You have a clear project or problem, and none of your current staff are capable of handling matters for you.

Your ability to write a clear, concise job description will hinge on why you are hiring a fractional executive. Furthermore, the details that you put in the job description will help inform the cost of the fractional CFO. So, let’s explore each case.

1. You know you have a financial problem, but you can’t put the words to it. 

As Gary Brooks, a CFO with almost 40 years of experience under his belt, puts it: “A lot of times, a CEO will bring him in because someone told them about a problem, and the CEO will have a hard time putting words to it. So, they need someone to do that for them. 

For instance, one CEO was having problems getting an audit finished, but they couldn’t exactly figure out why. Were the finance people at the company failing to do their job? Was the problem with the auditors? The CEO needed answers, and only a seasoned expert could get the job done.”

Now, the first thing Gary recommends is that the CEO should be careful when creating a job description. The reasoning is that in many scenarios, if they try to define the problem, they will most likely get it wrong. CEOs who lack a financial background will not know all the right questions to ask.     

Instead, the financial veteran recommends trusting your fractional CFO to define the problem for you. For example, when Gary walks into a company, he gives the CEO a list of documents that he wants to see early on so as to assess the financial situation of the company for himself. 

Here is the list Gary asks for:

  1. Description and History of the Business
  2. Current Financials (Last Month)
  3. Historical Financials - Audited if available - Last 3 Year End Statements 
  4. Current A/R aging (Last Month)
  5. Current A/P aging (Same Time Period as A/R Aging)
  6. Current available short term or long term cash forecasts
  7. Inventory Listing (if applicable)
  8. Details of any property plant and equipment (other than oil and gas properties)
  9. Description of current banking relationships.
  10. Summary of insurance program.
  11. Description of current status of tax accruals and payments
  12. Description of any significant deferred assets or liabilities, goodwill, major accruals (including asset retirement obligations), etc.
  13. Details of any significant contingent liabilities
  14. Description and amortization schedule of any Current Debt, including leases (Lender, Amount, Maturity, etc.)
  15. Financial Statements of Guarantor(s)
  16. Organization charts for Ownership(Include Ownership Percentages) and Key Employees.
  17. Listing of Related Entities / Affiliates (Include the Nature of the Business Relationship)
  18. Senior Management Bios
  19. Projections
  20. Explanation of Any Current or Pending Litigation
  21. Detailed description of any stock or royalty based compensation of employees/managers/owners?
  22. Detailed description of all equity transactions, if any.
  23. Details of all related party transactions.

These documents help Gary perform a deep dive into the company as if he were buying it and needed to perform his own due diligence. 

Based on his assessment, Gary will establish the top 4 or 5 priorities that he believes the company should focus on. In some cases, he might place at the very top of that list the original problem for which he was brought in. But there are other cases where Gary finds more pressing issues that need to be addressed first, some of which may be causing the issue that got Gary through the door in the first place. 

So, what are some of the most common problems Gary has found time and again?

  1. Banking relationships
  2. Processes and procedures
  3. Cash management and lack of cash forecasting

This is all good and well, but if you can’t write a job description, then how do you find the right fractional CFO who can perform the due diligence you need?

Seeing as you aren’t aware of what the problem is, you need to find a fractional CFO you trust. This can either be through your existing network or through a partnership of CFOs with a solid reputation. 

You will also need to treat the CFO as a strategic partner as they will be guiding you through some murky waters. So, you should find someone with whom you can work and who shares your values and work ethic. 

2. You are 100% aware of why your company needs a fractional CFO

On the other hand, if you are aware of why you need a fractional executive, then writing a job description is a much more straightforward job. 

For starters, you need to answer these questions based on your particular needs:

Once you’ve answered the above three questions, you should be in a much better position to craft the ideal job description. 

Here are the main components that your description should contain:

  • Job title and overview
  • Job responsibilities
  • Qualifications and experiences (which should cover both technical and behavioral requirements along with any additional qualifications)
  • Reporting structure

To make things more concrete, let’s imagine a hypothetical example together and see the ideal job description for that scenario.

A hypothetical fractional CFO job description

Let’s say that you have noticed that your finance team has been struggling to balance the books over the past few quarters. And while every member of that team is a hard, dedicated worker, they could use some help and coaching. 

So, you decide to bring in a fractional CFO to do the coaching for you.

With the stage set, let’s try to answer the three above questions:

  • Do you need Industry experience?

Industry experience isn’t as necessary as affability and the ability to build rapport with others. You also want someone with a solid accounting background so that they can help your team where they might be weakest. 

  • Do you need your fractional CFO to be geographically located next to you?

Since you need them to train your team, it would be ideal if they could come into the office once or twice a week. So, having them work remotely isn’t ideal in this scenario.

  • What are the exact tasks you need tackled?

Using the 10 Pillars of Finance framework, here are the main pillars you might need along with some of  the required tasks in each:

  • Executive Leadership (Employee evaluation, leadership development, team building, and recruiting if need be)
  • Controllership (Accounting processes, financial reporting, tax compliance, internal and external reporting, and internal controls)
  • Financial planning and strategy (forecasting, budgeting, and different types of analyses)

It is worth pointing out that while your fractional CFO won’t be doing any actual accounting or forecasting themselves, they still need to be good at those tasks if they are to coach your team at them. 

Having answered the above questions, we can now create a draft job description:

The only thing left to add to the above description would be the expected compensation range. Other than that, you are good to go.

The importance of expectations

Doug Hooper, a financial expert and a veteran of the pharmaceutical industry, explains that the job description doesn’t need to be too detailed so long as it does two things:

  1. Contains the main bullet points of what you need done.
  2. Highlights the expectations around how these issues will be tackled and the KPIs that will be used to evaluate that performance.

As Doug puts it, CEOs should make their expectations clear from the get-go. In return, the CFO should regularly communicate their progress. 

How to set your fractional CFO up for success

While having clear expectations and laying them out in a job description is critical, that is only half the battle. You need to be prepared to receive the fractional CFO once you hire them.   

So there are a few things you can do to ensure that your fractional hire gets the job done.

1. Delegate a specific contact person 

For the fractional CFO to succeed, Doug explains that the company needs to designate a primary person for them to deal with. Most of the time, it is the owner or the company president. The CFO always needs an avenue back to the decision-maker at some level.

2. Put the CFO in touch with the right people

When the fractional CFO walks into your company, they won’t know with whom they should be talking. So, to get them started off the right foot, you need to introduce them to all the major players they will be interacting with.

For instance, introducing your fractional CFO to the rest of the members of your C-suite is critical, especially if you are bringing in the CFO to be a strategic partner. Without this introduction, your fractional CFO will not have a clear understanding of the company’s vision and mission and will only see things from your perspective, making them less effective as a strategic partner. 

Additionally, the fractional CFO should meet the people they will lead, particularly if the CFO will be helping them place financial systems and procedures. Gary Brooks puts it best when he says: 

“Processes work better if they come from the bottom up rather than from the top down. It's very difficult for people at the top to think about how every single piece works at the bottom.”

3. Give your fractional CFOs time to settle in

Even though you might want your fractional hire to produce results from day one, the problem is that they will be going through some of their own ordeals as they integrate with your company.

For instance, if the fractional CFO is expected to lead your finance team, they might need some time to win the team over and get them to see the value of having a part-time executive on board. And while there might be some champions who are convinced of this hire, there will also be those who are doubtful and who refuse to follow this new authority figure.

Consequently, when a fractional CFO walks into a new situation, they need to earn that authority. They will need to show the skeptics exactly why they were brought in, which hinges on the fractional CFO being an expert in their field. 

Additionally, your fractional CFO might at some point start questioning your company’s way of doing things and being critical of the status quo. This is healthy as you want someone who is willing to shake things up as opposed to just following “the way things have always been.”

4. Be open to change

When asked about the biggest challenge he faces as a seasoned fractional CFO, Doug Hooper answered “resistance to change.”

A lot of times, a fractional CFO will walk into a situation, and after assessing the company’s financials, they will make a recommendation that certain processes and procedures need to be updated or changed altogether. 

The issue is that either the people at the company will refuse to change and will choose to hold on to the familiar and the comfortable, or they will take this initiative as the fractional CFO blaming them for using faulty processes. 

Instead, it needs to be clear that the fractional CFO isn’t blaming anyone when they are suggesting an improvement. They are only trying to serve the company to the best of their ability and to be the ideal strategic partner.  

5. Involve your fractional CFO and take their opinions about strategic matters

Even if you hired the fractional CFO to help with an operational problem, you should still treat them as a strategic partner.

For starters, they will have a unique perspective, one that is grounded in the realities of cash flow and future forecasts. This helps you appreciate the feasibility of different courses of action as well as the inherent risks in different scenarios.

Another important reason is that almost every small business owner reaches a point where they turn to their CFO, fractional or otherwise, and ask them the all fateful question: “How do I sell this thing?”

The Inevitable Conversation all business owners have with their CFOs

If you work with your CFO long enough, you are bound to ask them about the possibility of selling your business. This conversation usually comes after you’ve built years of trust with your financial partner.

There are several reasons a business owner might consider selling. For instance, here are a couple:

  • They’ve gotten on in years, and they would like to enjoy their golden years with their family.
  • Not all the children are involved in the business, so passing it on to them can be a bit of a problem as some will want to keep it and others will want to sell it. So rather than leaving the business to them, the owner might choose to sell it outright. 

Regardless of the reason, you will need someone to ferry you through the sometimes thorny M&A process, from planning to execution

Therefore, it’s not enough to select someone you work well with, but you also need to work at building a trusting relationship with them. This will ensure that when it’s time for you to make a gargantuan leap, you will have the right strategic partner at your side.

Putting it all together…

Writing the perfect fractional CFO job description starts with knowing what you need. In many cases, business owners might not be aware of what financial problem their business is going through, So, they need to bring in an expert they trust to help them diagnose the problem and tell them how to solve it. 

Alternatively, you might be 100% certain of why you need a fractional CFO. In that case, you are in a much better position to write a job description. You will be able to detail the responsibilities, the required skills, and the ideal experience for the job. This will enable you to cast a wider net than if you were uncertain about what you need done.

Bearing this in mind, once you have found the ideal candidate, you want to set them up for success. Part of that comes from wanting to ensure that your money is well-invested. But the other part comes from wanting to create a strategic partner, one that you can rely on in the big moments. 

So, if you want to find the perfect partner for your business, please do not hesitate to reach out and contact us for a free consultation. We would be happy to help you find the perfect fractional CFO for your business, one that can solve the problems of today and be the perfect partner for the adventures of tomorrow.

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