Hiring a CFO on either a fractional or full-time basis is an absolute game-changer for scaling your business.

Yet not all CFOs are equally effective.

To help you choose the right one, this week’s post is all about the good CFO’s first 90 days—where their focus should be and what you can expect.

Let’s get into it.

1. Understand the Business

This should be their top priority, and it shouldn’t be quick. After all, their baseline understanding of the company will go on to form the foundation of each decision that they make.

They need to fully review the company’s objectives, operations, and financial position independently before then speaking with ALL the key people that touch these roles.

2. Optimize for Cash First

A good CFO isn’t trying to do anything fancy right out of the gate. Their focus is on optimizing working capital first and foremost.

This includes stretching payables, streamlining the firm’s collections process, identifying better ways to use credit, and making payments more efficient.

When that’s done, they should create an updated cash flow forecast.

3. Improve Financial Processes

There are two parts to this.

The first focuses on the business’s financial infrastructure: the financial statements, bookkeeping, and technology already in place. At this stage, a good CFO is going after the low-hanging fruit to improve performance, cleaning up the books, and eliminating glaring sources of waste.

The second focuses on optimization: automated reporting, predictive study, and upgrading tech to do more with less. The goal here is to free up your team for higher-value work.

4. Drive Cost Cutting

The quickest way to boost cash flow is to cut costs.

With my clients, I do this by first reviewing budgets with each department leader and then implementing cost-cutting measures in order of efficiency. The goal here is to reduce expenses without taking a hit to quality.

5. Build a Financial Plan

At this point, your new CFO has plenty of data to build a financial roadmap for the business.

I do this by working with the CEO and other executives to come up with core KPIs to track, specific actions to improve them, and an agreed-upon approach for balancing risk and future growth.

6. Communicate Clearly

Lastly, good CFOs communicate the financial priorities to the rest of the business, i.e. to “non-finance” people.

I do this by sticking to a few rules of thumb.

First, I avoid using jargon and never present just the data by itself. I translate it into plain English by calling out the growth opportunities, benchmarking performance against the competition, and linking present insights to future actions.

By keeping everyone in the loop, even the most junior employee will be empowered to make the best decisions for your business in their day-to-day.

Putting It All Together

Here are your top takeaways from this week’s post.

1. Hiring the right CFO can be an absolute game-changer for scaling your business, but not all CFOs are created equal.

2. A good CFO isn’t trying to do anything fancy in their first 90 days on the job. Instead, they stick to a few key priorities.

3. Here’s what I like to do first:

   1. Understand the business.

   2. Optimize cash flow.

   3. Improve financial processes.

   4. Drive cost cutting.

   5. Build a financial plan.

   6. Communicate.

4. Building the financial plan comes after building a solid understanding of the business and taking care of the low-hanging fruit in steps 2-4. This order of operations allows your CFO to measure true performance once there’s less “noise” in the business.

5. Good CFOs translate even the most complicated financial data into actionable plans for all levels of the organization. They do this by cutting out the jargon and linking present insights to future decisions.

Hungry for More?

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2. Shoot me an email with your questions or requests for what you’d like me to write about next.

‘Til Next Time,

Connor