Questions to ask a CFO in a meeting

So you’ve got a meeting coming up with your company’s CFO and want to make the most of their time. As the chief financial officer, they’ve got their finger on the pulse of what’s really going on in the business and can provide key insights to help you do your job even better. But to get the best information, you need to ask the right questions from the CFO candidate. Here are a few suggestions to get the conversation flowing, and make sure you walk away with actionable advice and a better understanding of how you can positively impact the bottom line. Whether you’re looking to better manage your budget, forecast sales, or gain key business insights, these questions will help ensure your time with the CFO is productive and valuable. So, let’s dive into this extensive guide, which will help you with a list of CFO interview questions.

What Are the Company’s Current Financial Goals?

Sitting down with a CFO is a prime opportunity to gain insight into the financial priorities and goals of a company. Some key questions to ask include:

What are your key performance indicators this year?

Asking about their KPIs will reveal their focus on improving the company’s performance, like increasing revenue or cutting costs. See if they’re on track to meet these goals and if there are any roadblocks.

• What initiatives are in place to achieve these KPIs? New products or services? Process optimizations? Partnerships?
• How do these KPIs ladder up to the overall company strategy and mission?

What are your main sources of revenue and funding?

Understanding their revenue streams and funding sources provides context to their business model and stability.

• Do you rely primarily on sales, investments, loans, or a mix?
• Are there any major partnerships or licensing deals in place?
• How diverse and reliable are your revenue channels? Relying on a single source is risky.

What are your biggest costs, and how are you controlling them?

Controlling costs is key to profitability and success. Ask how they’re keeping major costs, like materials, labor, rent, etc., in check.

• Have any cost-cutting measures been implemented recently? Outsourcing or automation?
• Do you foresee any major cost increases on the horizon to be aware of?
• How do your costs compare to industry averages? Are there opportunities to trim further?

With a wealth of knowledge about the company’s financial health and priorities, you’ll be equipped to determine how your product, service, or partnership could support their key goals or if there are any areas of concern to be aware of. The CFO holds many insights—you just have to ask the right questions.

How Is the Company Performing Against Its Revenue Targets?

So, how’s business? As a good CFO, tracking revenue and performance versus targets is a big part of your job. Some key questions to ask:

How are sales this quarter compared to projections?

Are you meeting or exceeding targets in all areas, or are some products/services lagging behind? If so, what’s the plan to get back on track? Be prepared to discuss specifics.

• What marketing or sales initiatives have been most effective in generating new business? Are there opportunities to build on those successes?
• What does the forecast look like for next quarter and the rest of the fiscal year? Do you anticipate any major deals or contracts closing soon to boost business growth?

Revenue is the lifeblood of any company, so making sure money is coming in as planned is critical. Don’t be afraid to press for details on the business’s financial operations and growth, especially if targets aren’t being met. The more information you have, the better you can assess the situation and determine appropriate next steps.

What are the biggest threats or obstacles to achieving our revenue goals?

Every company faces challenges, whether it’s competition, economic factors, or operational issues. Understanding the key threats and financial planning allows you to develop strategies to mitigate risk. Some possible discussion points:

• How is the overall economy and market conditions impacting our business? Are there any signs a downturn could significantly hurt revenue?
• Do we have any major competitors that pose a threat to the sustainable growth of the company? Are they releasing innovative new products or undercutting us on price? How can we strengthen our competitive position?
• Are there any internal challenges like high costs, inefficient processes, or employee turnover that make it difficult to pursue new sales or retain existing customers? Addressing these obstacles could have a big impact on the bottom line.

A CFO’s job is to help ensure the financial success and viability of an organization. Asking the right questions about revenue and performance is key to gaining the insights needed to guide the company forward in a productive way.

What Are the Biggest Risks or Challenges From a Financial Perspective?

As CFO, one of your most important jobs is to manage financial risk. When meeting with the CFO, ask questions to better understand the current financial situation, biggest risks, and challenges they see for the company from a financial perspective.

What major economic trends are you monitoring closely?

• Changes in interest rates, inflation, global trade disputes, etc. These macroeconomic factors can significantly impact a company’s bottom line. The CFO should be closely following trends that could pose risks or open up opportunities.

How well do our financial controls and reporting processes function?

• Strong controls and transparent financial reports are crucial for any company. Ask how audits and compliance checks have gone, whether any issues were identified, and how they are being addressed. This shows you value integrity and accountability.

How much exposure do we have to fluctuations in commodity or material prices?

• If a company relies heavily on commodities or other raw materials, price changes can hurt profit margins. See how well costs are hedged against volatility and whether supply chain issues pose risks. Diversity of suppliers may also help minimize exposure.

What keeps you up at night from a financial perspective?

• This open-ended question gives the CFO a chance to share their biggest worries, uncertainties, or obstacles. Listen for what specifically concerns them, like high leverage ratios, loss of a major customer, lack of capital for investment, or other issues putting significant strain or uncertainty on the financials. Their concerns are well worth understanding.

Meeting with the CFO is a prime opportunity to gain key insights into risks and challenges. Asking targeted yet thoughtful questions about economic factors, financial controls, risk management, costs, and their biggest worries will help you better understand the company’s vulnerabilities and work with leadership to strengthen financial stability. By inviting open discussion of risks, you demonstrate your commitment to prudent management and fiscal wellbeing.

How Is Working Capital Being Managed?

As an investor, essential questions to ask the CFO about how they are managing working capital include:

How are accounts receivable being collected?

Accounts receivable (A/R) refers to the money owed to a company by its customers. Ask how long it takes on average to collect payment from customers and whether the terms are net 30, 60, or 90 days. Finding the right balance between being lenient with customers and tightening terms to improve cash flow is important. Are there any overdue accounts, and how are they following up? Strong A/R management ensures cash is coming into the business steadily.

What is the inventory turnover ratio?

The inventory turnover ratio measures how quickly inventory is sold and replaced. A higher ratio is better, as it means less cash is tied up in inventory. Ask what the ratio is for different products or departments. Are there any areas where more inventory is stocked than needed? Excess inventory reduces working capital and risks spoilage or obsolescence.

How are accounts payable being handled?

Accounts payable (A/P) refers to money owed by a company to its suppliers and vendors. Ask how they determine when and what to pay to take advantage of any early payment discounts while avoiding late fees. Do they have a system to ensure invoices are recorded and paid on time? Efficient A/P means making the most of the cash you have available.

How much cash is on hand?

Ask how much cash and cash equivalents the company has readily available. As a buffer, many experts recommend enough to cover 3 to 6 months of expenses. Cash on hand gives flexibility to take advantage of opportunities and deal with any emergencies. However, too much cash means lower returns on investments. Finding the optimal balance of liquidity and returns is key.
Discussing the management of working capital provides insight into how effectively a company is generating and using cash. The CFO’s answers to these types of questions around accounts receivable, inventory, accounts payable, and cash on hand can reveal how financially healthy and stable the organization really is.

What Is the Cash Flow Situation?

Asking about a company’s cash flow management is key to understanding its financial health and stability. As a CFO, cash flow is one of your top priorities, so they should be able to provide a transparent overview of how money is coming in and going out of the business. Some questions to ask include:

What is your cash flow like over the past year?

Have cash inflows from sales, accounts receivable collection, and investments been steady or fluctuating? How much cash do you currently have on hand to fund operations and pay any obligations? Knowing the trend in cash flow over time gives you insight into the company’s financial security and ability to invest in future growth.

What are your sources of cash inflow?

The main sources are typically sales, accounts receivable collection, investments, or financing. See what percentage of cash inflow comes from each source. If a large portion comes from investments or financing, it could indicate the company is having trouble generating cash from core operations.

What are your major cash outflows?

Common cash outflows include inventory purchases, operating expenses, capital investments, loan payments, or dividends. Ask what percentage goes to each and look for any disproportionately large outflows that could strain cash flow. See if costs seem properly controlled or if there are opportunities to improve efficiency.

Do you foresee any cash flow issues in the next 6-12 months?

Ask if there are any major obligations, investments, or other events on the horizon that could significantly impact cash levels, either positively or negatively. See if they have contingency plans in place to deal with potential cash flow problems. Their responses can reveal how well they are able to anticipate and mitigate financial risks.

How do you monitor cash flow and make adjustments as needed?

Find out what key metrics and tools the CFO uses to track cash flow performance. Look for signs. They take a proactive approach by monitoring trends, forecasts, and key performance indicators to identify issues early and make changes to optimize cash flow. Their system of oversight and control is reflective of how well they steward company funds.

In summary, a CFO should be eager to discuss the company’s cash flow situation in an open and thoughtful manner. Their responses to these types of questions can offer valuable insight into the financial competence and stability of the company. Be sure to read between the lines, as what they don’t say can be just as telling as what they do say. Look out for those red flags.

Are There Any Big Capital Expenditures Planned?

Big capital expenditures like new equipment, technology upgrades, facility improvements, or acquisitions can significantly impact a company’s financials and growth plans. It’s a good idea to ask the head of finance about any major investments on the horizon.

• Are there any large capital expenditure projects in the pipeline? This could include investments in new machinery, tools, equipment, vehicles, or technology that will cost a substantial amount. These types of big-ticket purchases often require budgeting and financing to fund them.
• Are there any plans for new construction or facility renovations? If the company is expanding operations or improving infrastructure, it will likely need to allocate money and resources to build or renovate physical spaces. This also includes real estate acquisitions to gain more property.
• Are there any upcoming mergers, acquisitions, or partnerships? Joining forces with another company through an acquisition, merger, or partnership can require a major capital outlay upfront to secure and integrate the new business relationship.
• How will these expenditures be financed? Big capital projects usually need funding from investors, bank loans, bonds, or stock offerings. Ask how the company plans to raise money to pay for these investments and how that may impact financial statements.
• How will these expenditures benefit future growth? While large capital expenditures often come with big price tags, the goal is that they will drive revenue, productivity, innovation, and company value over the long run. Discuss how these investments specifically support the organization’s strategic growth initiatives and long-term success.

Discussing significant capital expenditures with the CFO will provide important context around the company’s financial health, priorities, and trajectory. Make sure to understand the rationale, costs, and benefits associated with any major investments on the road ahead. Forecasting and budgeting for substantial capital projects is essential to effective business planning and avoiding unwanted surprises.

How Are Operating Expenses Being Controlled?

When meeting with a CFO, it’s important to understand how operating expenses are being controlled and optimized. Asking the right questions can give you insight into the financial health and management of the company.

• How have operating expenses changed over the past few years? Are costs increasing or decreasing overall? If increasing, what are the major drivers of these additional costs? If decreasing, what strategies or efficiencies have been implemented to cut costs?
• What percentage of revenue do operating expenses represent? A company with higher operating leverage (a higher percentage of fixed costs) can be riskier.
• What initiatives are in place to reduce variable costs like waste, excess inventory, and redundancies? Variable cost control is key to improving margins and profitability.
• How are budgets established and monitored for different departments? Strict budget oversight and cost center accountability are signs of a financially disciplined company.
• What metrics are used to evaluate the performance and efficiency of different business units? Metrics like cost per unit of output can uncover areas needing improvement.
• How integrated are financial reporting systems? Siloed systems can make controlling costs more difficult. Integrated systems provide more transparency and control.
• What risks could potentially impact expenses, and how are these risks being mitigated? External factors like inflation, economic downturns, and supply chain issues should be considered.
• What long-term strategies are being developed to strengthen the cost structure? Continual improvement to cost controls and eliminating inefficiencies are hallmarks of a well-managed organization.

Discussing operating expense management in depth with a CFO can provide valuable insight into the fiscal fitness and stability of a company. The answers to these questions will allow you to determine if leadership has expenses under control and is poised to fuel future growth.

What KPIs Are You Tracking for Financial Performance?

When meeting with a CFO, it’s important to understand what key performance indicators (KPIs) they are tracking to gauge the financial health and performance of the company. Asking the CFO about the KPIs they monitor regularly can provide insight into their priorities and what they deem most important for success.

• What are the top 3-5 KPIs you review most frequently? Some of the most common KPIs CFOs track include:
  • Revenue growth – Are sales and income increasing over time? Revenue growth is key to the long-term viability of any company.
  • Profit margins – How much profit is the company generating from its revenue? Higher margins mean the company is operating efficiently and keeping costs low.
  • Cash flow – Does the company have enough cash on hand to pay its expenses and fund growth? Positive cash flow is essential for stability.
  • Accounts receivable and payable – How quickly are customers paying their bills, and how promptly is the company paying vendors? This impacts cash flow and relationships.
  • Expense ratios – Are expenses staying within budget and in line with industry standards? Lower expense ratios mean higher profitability.
• Do you have target or threshold levels for each KPI? Asking about specific targets helps determine if the company is meeting its key objectives.
• How do you analyze trends in the KPIs over time? Looking at trends – whether improving, declining, or staying flat – provides context around the company’s overall financial trajectory.
• What actions do you take if certain KPIs are not meeting targets? This demonstrates how proactively the CFO addresses issues and works to get key metrics back on track.

Discussing the KPIs the CFO closely monitors and relies upon gives you a window into what they see as most financially meaningful for the company. The answers to these questions can reveal a lot about their leadership, priorities, and ability to take corrective action when needed to ensure the financial health and success of the organization.

What Can Other Departments Do to Support the Finance Team? FAQs

As CFO, one of your biggest responsibilities is managing your finance team. To help support them, here are some questions other department heads can ask:

How can we improve communication?

Open communication is key for any team to work efficiently together. Ask how you can improve communication between the finance team and team members from other departments. Maybe schedule regular meetings to provide updates, ask clarifying questions, and address any concerns. Offer to be available for any ad hoc questions as well.

Do you have the resources and tools you need?

The finance team relies heavily on software, tools, and other resources to do their jobs. Inquire if they have everything they need or if there are any resources that could help streamline processes. Additional staffing, updated technology, or extra training are all ways you might be able to support them.

How can we contribute to efficiency?

As a leader in another department, you likely interact with the finance team regularly. Ask how your team can help make their jobs easier. Can you provide reports or documents in a certain format? Meet internal deadlines to avoid delays? Respond to requests promptly? Small changes like these can add up to major time savings and improved productivity.

What are your biggest challenges?

Every team faces obstacles, and the finance department is no exception. Ask about their biggest pain points, frustrations, or roadblocks. Then, you can brainstorm ways to eliminate or mitigate them. Perhaps better systems, restructured processes, added staff, or allocated budget could help resolve their issues. Your support in navigating challenges can make a meaningful impact.
The best way to build a strong working relationship with your CFO and finance team is through open communication and a willingness to provide meaningful support. Asking thoughtful questions shows you value their time and want to see them succeed. In turn, they will appreciate your leadership and collaboration. Together, you can achieve great things for your organization.

Questions to Ask a CFO in a Meeting: Key Takeaways

When meeting with your company’s CFO, here are some key questions you should consider asking:

• What are our key financial priorities this year? These could include things like reducing debt, improving cash flow, lowering costs, and increasing revenue or profit margins. Knowing the CFO’s main focus will help ensure your department’s goals are aligned.
• How is our cash flow situation? Cash flow refers to the amount of money coming in and going out of a business. Ask if your company’s cash inflows and outflows are balanced or if there are any periods of negative cash flow you should be aware of.
• What do our financial ratios look like? Financial ratios provide insight into the company’s financial health and stability. Ask about key ratios like liquidity ratios (measure ability to pay off short-term debts), leverage ratios (measure amount of debt relative to equity), and profitability ratios (measure ability to generate profits).
• Where are costs rising or savings opportunities? Controlling costs and finding operational efficiencies are key to profitability. Ask if there are any areas of the business with rising costs you should monitor closely or look for ways to cut back. The CFO may also have ideas for cost-saving initiatives you could implement.
• How is our company valued? Company valuation refers to the total worth or market value of a business. Ask how your company’s valuation is determined and what factors are used, such as revenue, profits, assets, growth, industry comparisons, etc. Understanding valuation can provide context for financial decisions.

These questions should provide insight into the overall financial standing and priorities of your company. Be sure to ask follow-up questions for any information you need to be clarified or expanded upon. Meeting with your CFO regularly is a great way to gain financial literacy and align your department with the strategic goals of the business.

Conclusion

So there you have it, a few key questions you should consider asking your CFO in your next meeting. Their job is to know the numbers inside and out, so take advantage of their financial expertise. Ask about growth opportunities, risks you should be aware of, and ways you can improve spending or cut costs. The more you understand the financial health and direction of your company, the better equipped you’ll be to make strategic decisions. Meet with your CFO regularly, build that relationship, and don’t be afraid to ask the tough questions. Their insights can help set you and your company up for success. Keep learning, keep improving, and keep growing. You’ve got this!