Chief financial officer interview questions

What this hire must get done

Write the scorecard before you interview, then hire against it. Set the bracketed targets from your own numbers.

What to tell candidates before the interview

Say the hard parts plainly. People who wouldn't stay drop out early, and the ones who stay knew what they signed up for.

• Describe the books and team they'll inherit, honestly: how late the close runs today, which software you use, and what your outside CPA does now.
• Name what's ahead in the next year or two, such as a new credit line, an acquisition, a first audit or a sale, so candidates can tell you plainly whether they've done it before.
• Tell them the role signs off on payroll and payroll tax deposits. If withheld taxes go unpaid, the IRS can hold a responsible person who willfully failed to pay them personally liable.

How to run the interview

1. Same questions, same order. Ask every candidate the questions below and the same follow-ups. It is the only way to compare people fairly.
2. Two interviewers. An owner or manager and someone who does the work. Take notes on what the candidate says, not on how you feel about them.
3. Score right after each answer. 5 sounds like the strong answer, 3 like the mixed one, 1 like the weak one. Use 2 and 4 for answers in between.
4. Rate alone, then compare. Compare candidates question by question, and talk only after everyone has scored. Big gaps are worth a conversation.

1. Behavioral · Close and reporting

   Walk me through each finance job you've held, starting with the earliest. For each one, what shape were the books in when you arrived, and when you left?

   Going job by job shows what they actually fixed, not just what they oversaw, and gives you specific points to check with references.

   Follow-ups

   • What were you hired to fix, and who would say you fixed it?
   • What went wrong on your watch?
   • Why did you leave, and who there would vouch for the result?

   5Strong

   Each job has a clear starting point and a measured result: close cut from [weeks] to [days], audit findings cleared, a forecast the owner used weekly. Owns a mistake. Exits make sense and match what bosses will say.

   3Mixed

   Describes duties more than results, or the gains came mostly from a software change someone else led.

   1Weak

   Can't say what the books looked like before or after, or every job ended in a falling-out with the owner.

2. Technical · Close and reporting

   A company sells service calls, installs and prepaid maintenance plans. Walk me through your month-end close. What has to be true before the P&L goes to the owner?

   The close shows whether the numbers are accrual-based and trustworthy, or a cash report with a P&L label on it.

   Follow-ups

   • How do you book a maintenance plan the customer paid for upfront?
   • Which accounts do you insist on reconciling every month?
   • What usually slows a close down, and how do you fix it?

   5Strong

   Reconciles bank, card, merchant and payroll accounts; ties receivables and payables to the balance sheet; accrues unbilled work, wages and vendor bills; holds prepaid plans as deferred revenue, earned as visits are done or over the term, as agreed with the CPA; compares each line with last month and budget.

   3Mixed

   Reconciles the bank and cards but runs the P&L mostly on cash, with no accruals, so prepaid plans count as revenue the day they're paid.

   1Weak

   Closes when the bookkeeper says it's done, and can't name which accounts get reconciled.

3. Situational · Cash and banking

   At quarter-end you see the company will miss its fixed charge coverage covenant by a small margin. The CEO wants to wait until the compliance certificate is due before telling the bank. What do you do?

   How they handle the bank under pressure decides whether the company gets a waiver or a lender that stops trusting its numbers.

   Follow-ups

   • What would you tell the CEO?
   • What would you bring to the banker?
   • What would you change so you see it coming next time?

   5Strong

   Works out the exact shortfall under the loan agreement's own definitions and notice rules, shows the CEO why the bank should hear early, and calls the banker before the certificate is due with the cause, a fix and a waiver request. Adds a covenant forecast to the monthly package.

   3Mixed

   Agrees the bank must hear, but goes along with waiting until the certificate is due and has no plan to forecast covenants ahead.

   1Weak

   Looks for ways to shift the timing of costs or revenue so the test passes, or would hide the miss.

4. Behavioral · Cash and banking

   Tell me about a time cash got tighter than your forecast said it would. What did you miss, and what did you do in the next [two] weeks?

   Every forecast misses sometimes. You want the CFO who says so fast, picks the right levers and fixes the method.

   Follow-ups

   • When did you see it, and who did you tell?
   • Which levers did you pull first, and why those?
   • What did you change in the forecast afterward?

   5Strong

   Names the cause, such as a large customer paying late or an early slow season. Told the CEO that day with options. Pulled levers in order (collections, agreed vendor terms, delayed purchases, the credit line) while keeping payroll and tax deposits whole. Changed the forecast method.

   3Mixed

   Got through it, mostly by drawing on the line, without changing what caused the miss.

   1Weak

   Says the forecast never misses, or covered the gap by paying vendors or taxes late without telling anyone.

5. Technical · Job costing

   Walk me through what goes into the cost of a job in your reports: which labor, burden and overhead go in, and which stay out.

   If job costs leave out burden or unbilled time, every job looks better than it is, and prices drift below true cost.

   Follow-ups

   • How do you burden a technician's wage, and with what?
   • Where do trucks, drive time, shop time and callbacks show up?
   • How would you get field managers to trust the job cost report?

   5Strong

   Direct costs: hours at a burdened rate (payroll taxes, workers' comp, benefits), materials net of returns, subcontractors and permits. Office and sales overhead stays out, tracked separately and recovered through an overhead rate in prices. Drive time, unbilled time and callbacks get their own lines, tied to the P&L.

   3Mixed

   Gets labor hours and materials right but uses raw wages without burden, or lets callbacks and drive time disappear into overhead.

   1Weak

   Uses estimated costs instead of actuals, or can't tie job costs back to the P&L.

6. Situational · Controls and fraud prevention

   The office manager has worked for the owner for [12] years, pays the bills, runs payroll and reconciles the bank account. Everyone trusts this person completely. What do you do?

   When one person can pay, record and reconcile with no one checking, errors and theft can go unseen for a long time. A strong CFO fixes it without insulting anyone.

   Follow-ups

   • What would you change first, and how would you explain it to the office manager?
   • What would you look at in past records, and how quietly?
   • How would you bring the owner in?

   5Strong

   Splits duties so no one person can both send and record a payment: someone else reconciles the bank, ACH and wires need two approvers, vendor bank changes are confirmed through a second channel, and positive pay screens checks. Calls it standard protection. Quietly reviews vendors, payroll names and sample payments.

   3Mixed

   Sees the risk and has the owner review bank statements, but leaves payments and payroll with one person.

   1Weak

   Trusts the long tenure and changes nothing, or treats the office manager as a suspect in front of others.

7. Situational · Advising the CEO

   Your CEO has found a competitor for sale, and its owner says the business earns [1.5 million dollars] a year. How do you test that number before a price is agreed?

   A seller's earnings figure usually comes with adjustments. A CFO who rebuilds it from records keeps the company from paying for profit that isn't there.

   Follow-ups

   • Which of the owner's add-backs would you accept, and which would you push back on?
   • What does the buyer take on with the seller's prepaid maintenance plans and warranties?
   • What would make you tell the CEO to walk away?

   5Strong

   Rebuilds earnings from tax returns, bank deposits and job records, not the seller's summary. Tests each add-back, checks customer concentration, technician turnover, working capital and open warranties, and counts prepaid plans as visits the buyer still owes. Gets an outside quality-of-earnings review when the deal size warrants.

   3Mixed

   Checks the books carefully but accepts the seller's add-backs as given, or misses the visits still owed on prepaid plans.

   1Weak

   Relies on the seller's or broker's summary, or leaves the review to the CPA without reading it.

8. Situational · Tax and payroll compliance

   Payroll is due Friday and cash is short. The controller suggests paying everyone in full but holding the federal payroll tax deposit for [two] weeks. What do you do?

   This is the shortcut that can turn a cash problem into personal liability for whoever chose to pay other bills first.

   Follow-ups

   • Why does that tax money matter more than other bills?
   • Where would you find the cash instead?
   • Who do you tell, and when?

   5Strong

   Refuses. Withheld income tax and the employees' Social Security and Medicare are held in trust, and paying other bills instead is a sign of willfulness the IRS can use to hold responsible people personally liable. Finds cash elsewhere (the line, collections, agreed vendor timing) and tells the CEO that day.

   3Mixed

   Refuses to hold the deposit but can't explain why it's different from other bills, or has no plan for finding the cash.

   1Weak

   Agrees to hold it, or treats payroll taxes as one more bill to stretch.

9. Behavioral · Tax and payroll compliance

   Describe a tax or accounting call where you and your outside CPA saw it differently. How was it settled?

   A CFO should manage the tax partner, not hand everything over and sign. This shows who owns the deadlines and the judgment calls.

   Follow-ups

   • What were you asking them to do that they weren't doing?
   • How did you decide who was right on the technical point?
   • What did you change about how you work with them?

   5Strong

   Names the issue, such as sales tax on installs, an entity question or depreciation choices. Came with research and clean books, got a written answer or a second opinion, and now keeps the tax calendar themselves.

   3Mixed

   Works well with the CPA but treats tax as the CPA's job, and reviews returns lightly before signing.

   1Weak

   Hands everything to the CPA, or can't name a tax issue they managed.

10. Situational · Advising the CEO

    The CEO wants to pay cash for [six] new trucks because the bank's loan rate feels too high. How do you advise?

    It shows whether they think in cash timing and tradeoffs, and whether they can disagree with the CEO and still support the decision.

    Follow-ups

    • What would you want to know about cash over the next year?
    • How do you compare paying cash, a loan and a lease?
    • What do you do if the CEO still wants to pay cash?

    5Strong

    Runs the cash forecast with and without the purchase, compares total cost and cash timing for cash, loan and lease, checks tax effects with the CPA, protects the cushion for the slow season and covenant room, and gives a clear recommendation. Supports the final call and tracks it.

    3Mixed

    Compares interest rates well but ignores what paying cash does to the low point in the slow season.

    1Weak

    Agrees with no analysis, or blocks it with a flat no and no options.

Work exercise: fix a weekly cash forecast

Give finalists a made-up [13]-week cash forecast for a seasonal home service company with [three] planted problems: payroll entered at net pay with the payroll tax deposits left out, a month with three biweekly payrolls entered as two, and a large commercial invoice, already [60] days late, counted as paid on time. Give them [40] minutes to find the problems, fix the forecast and write a short note to the CEO on what to do. Use only made-up numbers.

Use made-up materials, never real customer work, and keep it to the time shown. Follow your own safety rules for anything hands-on.

Reference check questions

Tell finalists you'll call a former manager, and get their permission first. Ask about what they did, not whether they were nice.

• How long did their monthly close take when they started and when they left? Did you ever have to correct numbers they'd already sent?
• How did they work with your bank and outside CPA? Tell me about a hard conversation with either one.
• What controls did they put in place, and who pushed back?
• Tell me about a time they told you something about the numbers you didn't want to hear. Would you hire them again as CFO?

Questions to skip, and what to ask instead

Ask only what the job needs. Questions that touch age, health, family or pay history can break federal, state or local law, even when you mean well.

• SkipWhat's your current base and bonus?

  AskThe role pays [base range] plus [bonus tied to which results]. What would you need to accept an offer?

• SkipHave you ever been arrested?

  AskAn arrest alone doesn't prove anyone did anything. If convictions matter for a job that controls the company's money, ask only at the point your state and city allow, and weigh how serious, how old and how job-related the offense is.

• SkipBefore we go further, I'm going to pull your credit.

  AskTell finalists early if a credit check is part of the process for this role. See the FAQ below for the notice and permission it takes.

Common mistakes when hiring a chief financial officer

• Hiring a big-company finance executive who hasn't done the work

  In a home service company, the CFO often builds the forecast, fixes the close and sits with the bookkeeper. Ask what they did with their own hands in their last role, and check it in the exercise.

• Letting a CPA license stand in for the job

  A CPA license shows accounting knowledge. It doesn't show they can forecast cash through a slow season, negotiate with a bank or explain a margin problem to a field manager. Test those directly.

• Hiring the CFO who agrees with you

  Owners often warm to the candidate who likes their plans. The CFO you need is the one who shows you the math, disagrees when it doesn't work and brings options. Listen for that in the truck and covenant questions.

Chief financial officer interview FAQ