KPI Checklist for Evaluating Your CFO or Controller

May 22, 2018

Updated 7/29/2019. How do you grade the accomplishments of your Chief Financial Officer or Controller? Not only at review time, but whenever you’re thinking of the value this key management team member brings to your company. What are the key performance indicators, or KPIs, that really matter to you? Does your CFO or Controller know the KPIs that define success in your eyes? How could they know if you don’t?

Here’s what to do:

For starters, review the job description you created before hiring your finance chief. Does it accurately describe what you feel that you’re actually getting out of this person on a day-to-day and long-range basis? Any surprises?

Next, lay out the KPIs that you deem critical. We’ve outlined a few that we feel could be important, but think about how or if they could be of value to your business. You may have other KPIs in mind that don’t match the needs of many other companies. So, think of the following two categories of performance markers as thought-starters and add your own KPIs to the list if we’ve missed any.

Strategic Planning For Controllers or CFO’s

These factors are part of the long-range financial thinking and decision-making that tends to fall into the purview of Controllers or CFOs.

Are risk management decisions on point?
Have effective business and tax planning initiatives been undertaken?
What capital expenditures have been made? Did they make fiscal sense?
Have research and development initiatives added value?
How would you judge the accuracy of budgeting and forecasting?
What would be your judgement on ERP implementation/consolidation of the reporting process?

Bottom line numbers

Your CFO or Controller plays a huge part in the hard numbers that affect your balance sheet. While the prior category of KPIs might best impact your three-year or five-year plan, this category reflects what’s happening now.

Have net margins and key financial ratios improved?
Are overhead costs in line with industry norms?
How well has working capital been managed?
Has days sales outstanding (DSO) been improved?
What are the number of days involved in the monthly close?
What do the numbers show for inventory turns and obsolete inventory/write-offs?

Add your own KPIs

How are we doing so far? What have we left out? Every company is different, so we’re sure there are issues and expectations specific to you that we haven’t outlined here. Figure them out and add them to your checklist.

Now you’re ready for an in-depth and honest evaluation and a meaningful discussion with your CFO or company Controller on progress made and performance markers that still need to be met.

Paul Ursich is Partner of Advisory Services at Wiss & Company LLP. You can reach him at [email protected] or by calling Wiss at (973) 994-9400.