The CFO Litmus Test
A practical guide to vetting fractional CFO talent — and finding the financial partner your growing business actually needs.
Dear Level: I’m an agency owner happily scaling! But I’m at that moment – that “this thing is nuts, how are we doing this, what should I be planning for” moment – and I know in my gut that we need some finance support to keep this momentum going sustainably. I’m leaning towards a fractional hire, and want to talk to several people in the coming weeks. But I’m a creative, not a finance professional. How do I start vetting fractional CFOs for my unique business? – Creative with Pictures, Not Numbers
Dear Creative with Pictures,
The truth is that there are a lot of avenues for finding fractional finance talent these days, including good old LinkedIn, wherein folks of all kinds of experience levels will apply to your job posting. It can be confusing and overwhelming, especially because there are so many pros who could potentially be incredibly helpful to your company. Fit, though, is absolutely essential; hiring the wrong person can cost a surprising amount of time and money.
We’ll break down everything you should know below, but there are 3 rules of thumb to apply for every interview:
1) make sure candidates have actually done the CFO role, not just worked up to it;
2) make sure the candidate can work collaboratively across the business; and
3) look for a CFO that matches your stage of growth – check our CFO archetypes, mapped to business stage, to get some guiding interview questions that help assess a candidate’s specialty.
You’ll get the most out of your conversations if you’ve also set appropriate expectations for the role. We’ll help you do that here. But we also recommend giving the job description a second look to make sure that you are asking a CFO to do CFO work – and not the work of the entire finance stack. Depending on your setup, you may need additional finance team members, like a controller, accountant, and bookkeeper. To be truly effective, CFOs need the support of these roles to keep the books clean and build the accurate historicals that inform your business's future. And make sure that your team is ready to receive CFO-level advice. They will challenge you in service of changing you – and that's where their value really resides.
Read on to hear Level CFOs Kim and Sarah dive deep into CFO vetting. You’ll learn:
What you should expect from anyone with a CFO title
How CFO-specific thinking drives business value
The top questions to ask in vetting a candidate’s skills and capabilities
What you need to think about in preparing your team to bring in this hire
What should a business owner reasonably expect from finance leadership?
Kim: I'm going to be upfront about something, because I think it is potentially hurting folks' perception of the fractional CFO model. More and more people are advertising themselves as fractional CFOs who have not actually held that role. They've perhaps worked up to that level — maybe as a senior analyst or controller — attracted by the chance to claim that C-suite title. But until they've actually done the role, they are not prepared to guide you.
If they've come up through the controller role, they've spent most of their time looking at the past, not the future. Controllers make sure the books are squeaky clean — they don't look six months out and see that cash will be running dry. They also haven't been in the leadership seat, navigating the natural tensions that emerge among departments. There is nothing that replaces this experience. If they haven't been a CFO, I would be hesitant to trust the guidance you're getting.
It also works the other way around. I've had prospects who want to hire me to be both controller and CFO. I'll tell anyone that I'm a horrible controller — that is not my gift. I work with great controllers who keep the day-to-day accounting function running smoothly. But I live six to eighteen months in the future.
Sarah: Controllers and CFOs have two different knowledge bases and skill sets. For folks who've come up through accounting, their mindset is oriented around executing and reporting — bucketizing what just happened. They're great organizers. Many CFOs do come up through this route, but to succeed, they have to adopt a complete mindset shift toward the future. They are not organizing anymore — they are interpreting. It's hard to explain how difficult this transition can be: it's two entirely different ways of looking at the same set of numbers.
Business owners should expect a CFO to take what your accounting arm is reporting and help guide credible executive decisions. The CFO should immediately be able to say, "Ok, this most recent report means A, B, or C. Now we need to make decisions on D, E, and F." The only way that's possible is for this person to understand all the interconnected pieces, and how past performance shapes the vision six months down the road. If your finance leader can't do that, you are going to fail.
What should I expect from a CFO’s thinking and decision-making?
Kim: The first, most important capability every CFO needs is to be able to see past the accounting arm and into the full operations of the business. They need to understand what levers make the business change and grow.
Sarah: Absolutely. That’s one reason why I like looking for CFOs who have come up through the FP&A (Financial Planning and Analysis) team; they will have long-running familiarity with the task of sitting with teams across the business and getting to the bottom of changes that have impacted the business, for better or worse.
Let’s say a marketing team has gone way over budget this month. The FP&A rep will talk through that shift with them – they’ll find, for example, that they shifted more spend into a high-performing social campaign, and the return on that campaign was booming, which related to X increase in site traffic and Y uptick in revenue. They know how to connect on-the-ground operations to the numbers, an essential CFO-level skill.
The CFO takes that on-the-ground insight a step further, outlining next steps based on this information. We help the business learn: do we need to do further investments in this channel? Does another strategy need more funds to deliver on value? The CFO leads those strategic conversations.
Tell us about a time when you inherited a situation where someone was operating above their level? What did that look like?
KIM: I worked with a non-profit that hired one person to do all of the work across the finance stack. They expected that one person to be the bookkeeper, the accountant, controller, and the CFO. It’s really common to see this in small organizations, because it is easy to think that hiring one senior person is the best, most affordable solution.
Any professional knows they are not good at everything — we all specialize, we all have unique talents. And even if they found that unicorn who knows and enjoys every part of this role, it's just too much work for one person. They stretched this employee too thin, resulting in inaccuracies across the books and a lack of strategic planning. That's unfair to the employee, and unwise for your business.
SARAH: It's really hard to hold both macro and micro perspectives at once. When you're deep in the weeds — doing recon, journal entries — you lose your ability to step back and see the larger picture. This isn't a personal failure; most people struggle to shift this perspective efficiently. When I've had to do super tactical work, I need to remove myself from that project for a few days before I can shift back into CFO-mode. That's not an efficient use of time.
Something I see pretty often: a small business has outsourced its bookkeeping but isn't keeping enough contact with that outside team. That bookkeeper isn't doing anything wrong — they're making their best assumptions about what each transaction means. But if they don't know the nuances of your contracts, they're likely not recording revenue correctly, which makes it harder to forecast cash. And then you're left with a surprise: "I thought I had all of this money in the bank. What happened?" This kind of situation is easy to create and hard to resolve, and it emerges not because something was done wrong, but because the business didn't have the right knowledge base in place. That's an easy mistake for owners without a finance background to make. You just don't know what you don't know.
What questions should I ask a potential CFO hire?
SARAH: The first question I would ask is, “What do your month-end recaps to the CEO and/or board look like?” If their answer is, “Well, we just give them the P&L,” that’s a red flag. I would rather hear, “We review the P&L, and then we discuss strategy changes.”
KIM: The next question for me is, “What experience do you have with managing cash?”
SARAH: Well, I’m laughing – that one should probably always be first.
KIM: Right? Here's what good looks like: the candidate understands that a standard 13-week cash forecast is just the beginning, because the cadence of cash forecasting is incredibly business dependent. I have a client for whom we forecast cash two years at a time, based on the hills and valleys of their industry and sales cycle. If we didn't, we'd have no idea where cash really sits.
The candidate should also ask about your cash demands in framing their response. A good candidate will want to understand your cash levers, so that when a client needs you to front a big portion of a project, they can find avenues to make that happen — or help you say no when necessary.
I'd follow it up with "How do you think through financial forecasting?" You want indicators that this person knows how to filter reality from fluff and set realistic expectations. It's a good sign when a candidate questions your growth projections and digs into your assumptions — that's the sign you'll have a real partner on the executive team.
SARAH: And finally, I think it’s really important to ensure that they’ve worked with marketing, sales, and biz dev. So ask them: “Tell me about a time when you’ve worked with marketing and biz dev to create sustainable growth?” Look for signs that they are truly a partner with these teams, rather than taking an authoritarian tack. Every good CFO knows that you need to spend in these areas to get a result.
KIM: I don’t know any good CFO who hasn’t spent a lot of time working collaboratively with those functions. I think my final bit of advice is to ensure that whoever you hire should want to own the numbers, and be held accountable for them. Fractional CFOs worth their salt will claim that ownership happily.
What kind of soft skills – not measured by a spreadsheet – do you look for in a good CFO?
KIM: Well, this one is for our Creative with Pictures reader; I really value someone who is creative and imaginative, and who can share in your vision with you. You want to work with someone who believes in what you’re building, can see the promise in it, and enjoys navigating the uncertainty that is part of any creative endeavor. Every business is a unique work of art. Excellent CFOs are masters of the medium.
SARAH: Right - gone are the days of the CFO or accountant who just says “No” all day long. The role of the CFO today is to say, “Great. I get it. I love it. Here’s how we are going to get it done.”
That means that CFOs need to be decent at change management. There will be changes in small and large ways when you make this hire, and there will also be seasons when the CFO does have to say no to an idea to keep your company on track. It’s a hell of a lot easier to hold that line when you’ve been a creative, supportive leader along the way.
KIM: I agree. I’d add that CFOs need to be bold and honest in protecting the vision. That takes nuanced communication, emotional regulation, and the ability to give real critique and feedback. There's no doubt about it: as the owner, you rely on your CFO to both validate and challenge your ideas. The cliché, "If it doesn't challenge you, it doesn't change you," is entirely apt here. Personally, I think this is one of the benefits of hiring fractional for this role — a more objective perspective can be really helpful in navigating these tense moments.
SARAH: Last but not least – you want someone who is solution oriented. You don’t want to hire someone who is going to just come in and diagnose your problem. I would expect them to come in with a plan of action. You are paying them to solve the problem, efficiently. So you want to ask questions that help you assess how solution-driven they are in their work: “Can you walk me through a specific financial challenge you inherited — maybe a cash flow issue, a reporting gap, or a cost structure problem — and tell me exactly what steps you took to resolve it?”
KIM: Finding the right fractional CFO is about finding a genuine partner in your growth. You're bringing in a strategic voice who will challenge your assumptions, protect your vision, and help you build something that lasts.
Set the bar here – real CFO experience, collaborative instincts, cash fluency, and the courage to tell you what you need to hear. And the right person won’t simply pump the brakes on your ideas, but rather figure out how to fund them.
So take your time with the vetting process. Ask the hard questions. And when you find someone who lights up talking about your business's future with the same energy you do?
That's your person.
Every month, we share a conversation with Level pros answering your pressing finance and operations questions, and sharing insights from behind the scenes of building fractional careers.
Level Pros work across the finance stack, with experience across industry and stage of growth too. If you’re wondering how to find the right pro for your business, book a free 30-minute call with one of our CFOs.
