Experienced CFOs explain how to shape your team
Clear organisational structure is vital to every business. The more you grow, the more important it is to build your team(s) with purpose. And while it seems simple to manage everyone at the beginning - you're probably all in one room - this can quickly turn into chaos.
More organisation can help every facet of your startup. But for this post, we're going to focus specifically on the finance department. This is often a new addition for growing businesses, which means you get the chance to build it mindfully.
A wide range of professionals deal closely with the finance team: CFOs, financial managers, HR professionals, office managers, accountants, data/business analysts and more. So how you structure this team will directly affect your ability to grow.
But how should you approach this in real terms?
This was the theme of our CFO Connect meetup #3 on April 18th 2018, an event we organise to tackle the most important topics faced by finance departments. Two speakers along with CFOs from startups and SMEs get together at these monthly events.
We asked our guest speakers to explain how to build a finance team for sustainability, while keeping your business flexible and efficient. Here’s a recap of their contribution along with their top tips to help you structure your finance team.
About our experts:
Laurent Maheo: With 25 years experience as CFO of DHL / Geodis, Laurent is also an entrepreneur and co-founded Supply-chainfinance (financial digitalisation for large companies) and FinUp (financial services for startups). He is also President of the DFCG Île-de-France (French National Association of Finance Directors and Management Controllers), which counts more than 3,500 financial decision makers among its ranks.
Thibault Remy: After gaining experience as a financial consultant, he joined the startup MeilleursAgents as CFO in April of 2010. This digital real estate platform has already raised three rounds of funding and its team has grown from 20 to 200 employees since Thibault joined them. Quite an achievement!
Here's what they told us about building a finance office:
1. Get yourself a good accountant
As Laurent said, a CFO's job is built on three main pillars: transactions, statutes and performance. For the accounting aspect, it’s up to you whether to outsource or not. But you need to be aware that the role of accountant has evolved a lot!
"In the past, the job mostly consisted of data entry. But today accountants fulfill a real advisory role," Laurence said. You're going to be relying on this person's guidance - especially if an audit comes around.
"You have to go looking for expertise. It’s vital to get support from a chartered accountant and enlist their help in building processes," Thibault added.
With support from an accounting professional, a CFO can avoid certain pitfalls. Philippe Platon, Finance and HR Director of La Ruche qui dit Oui! said: "We decided early on to insource accounting. Despite being fairly straightforward to set up, our technological savvy in terms of accounting was lacking, and our information sharing with Office Management wasn’t great. It was full of mistakes and it took a year’s work to set everything right. It’s just so important to have a good accountant."
2. Stay ahead of the game
“I should’ve recruited sooner.” You hear CFOs say this all the time. “We always delay too long before recruiting. Being understaffed leads to stress, inefficiency and wasted time,” Laurent said.
He suggested an easy remedy for this: “You can stay ahead of the game by anticipating busy periods that require extra resources.”
Thibeau listed a few such cases:
Stock market launch
Increased rate of growth (impact on billing, customer care etc.)
Launching a new pricing system or product innovation
3. Define your exact needs
What should you do when it becomes clear that it’s time to structure your finance team? Find out what your teams want and make that your priority.
“The CFO can take this information and use it to start structuring the finance team. The most suitable candidates to meet the needs you’ve set out can then be recruited gradually,” Thibault said.
A few good examples:
After a period of strong growth, you start spending more and more time on reporting and monitoring, and less on overarching tasks. Position to be filled: Administration and Finance Manager (AFM).
When pursuing Series B financing, you need to have your KPIs in order to reassure shareholders.
Position to be filled: Business Analyst, AFM, HR, legal expert, Office Manager, Data Analyst... There’s a wide range of professionals you can call on to improve your financial management!
4. Don’t underestimate data
The reason you’re hearing more and more about CFOs (and less about financial directors), is because the role of finance within companies is evolving. In addition to financial expertise, today’s CFOs are tech savvy, equipped with data skills and have a strong aptitude for all things digital.
In fact, Laurent has found it’s not just startups that are embracing this approach, but also big companies. “A CFO has to have a strong handle on data,” Laurent said. It’s a pivotal factor in structuring the finance team!
Thibault agreed: “today, we’re immersed in data. A CFO has to be able to bring together all the available data, be it from billing, CRM or elsewhere.”
This has an impact on recruiting, with companies favouring professionals with experience as Business Analysts, BIs, CDOs etc. to optimise their finance department.
5. Think quality
“Even when you’re busy, you have to make time to get the right people onboard!” For Thibault, quality is the one thing you can’t afford to compromise on when structuring a team. A CFO can end up wasting a lot of time by taking the easy option when it comes to hiring.
But how do you choose the right person for the job? “Surround yourself with doers,” Laurent advised. He further specified that “it’s not just the candidate's background and their position that counts. The most important thing is know-how!”
If recruiting is proving difficult, you always have the option of calling on an experienced CFO on a part-time basis (for bigger projects such as internationalisation, setting up an ERP system, etc.). This is a service that SupplyChainFinance provides.
6. Use the right tools!
Apart from getting the right people on board, a CFO also needs to choose the right tools to improve performance (billing, BI, ERP, etc.). “Being able to enlist expertise from outside helps unburden a CFO of the most time-consuming tasks,” Thibault said. “The goal is to have the finance team fully focused on their core expertise."
This is where choosing the right software is of the utmost importance. Some companies even ask if they’d be best served by developing their own customised software.
In answer to this question, Laurent replied that it’s not necessary since it takes so much time and since there are readily available SaaS solutions that are as efficient as they are secure. “You may as well take advantage!”.
He ranked software according to priority:
Start with a SaaS solution for the purpose of structuring (Intuit, Quickbooks)
As the company grows, opt for a good ERP system
You can then consolidate all of that with more advanced software (like Netsuite or Workday) And then what? Laurent told us what he thinks the future of finance management will look like: Artificial Intelligence.
With A.I., you’ll be able to call up reports according to a specific question (“where are we on this or that project…”). Stay tuned!
Any CFO can structure a strong finance team if they enlist a skilled accountant and anticipate and define their recruitment needs properly, without compromising on quality. CFOs must also be very data-oriented and choose good resources (in terms of staff and software) to successfully leverage data.
Lastly, tools such as Spendesk can help them to continually optimise their spend management and make their day-to-day activities simpler by saving them time.