Hacker News Reader

I'd strongly disagree that it's not the CFO's job to foster and enhance company culture. If your CFO is a cost-cutting machine, I hope he's not highly compensated. Any qualified first-year accountant can do that job.

It's a good CFO's job to make sure that resources are invested strategically. Indeed, it's every executive's job to work together towards a shared vision and goal. If someone is working towards a different goal, you're inviting unnecessary conflict. No one should need to be micromanaged - at any point - if they share the goal and the culture along with the rest of the employees.

When you bring in an outside CFO, chances are that you're getting a highly paid individual whose main incentive is to increase the valuation of your company to make it look good for an acquisition, increasing revenues substantially, or going public.

Cost cutting is just one tool in their toolbelt to work towards it. But it's the sharpest and most easily understood tool they have so that's why they will reach for it so often.

In an ideal world, you'll get a CFO that totally jives with you culturally, accepts a lower salary (or limited equity stake), and just handles all the paperwork. But such people will rarely carry the title of CFO.

> "In an ideal world, you'll get a CFO that totally jives with you culturally, accepts a lower salary (or limited equity stake), and just handles all the paperwork."

Again, I have to disagree. Ideally you get a proactive CFO who understands the value of the company culture, and works to encourage it. Yes, even if that costs more money. A paper pusher who stays out of your way does not approach the value of a good CFO who gets what the company is about and what they're trying to do.

Anyone who hires a paper-pushing-bean-counting CFO should not be surprised when that CFO tries to sacrifice long-term success for short-term balance sheet exhibition.

> Anyone who hires a paper-pushing-bean-counting CFO should not be surprised when that CFO tries to sacrifice long-term success for short-term balance sheet exhibition.

This is the point. You are not to be surprised, but as CEO be ready that your CFO will require guidance while doing otherwise useful things.

Exactly my point.

Should a CFO be singularly focused on bean counting to the detriment of company culture? No.

Is that often the reality when you bring in an outsider as CFO well after your company culture is established? Yes.

CEOs just need to be aware of this fact and work closely with any outsider who gets hired into a CFO position in their first 6 months on the job to make sure that all interests are aligned. It would be great to find someone up front that totally gets it and is willing to be a dedicated CFO, but I think such individuals are extremely hard to find.

The sad fact is, many CEOs only bring in a CFO when they're trying to find a way to cash out. Company culture usually takes a back seat at that point.

I couldn't agree more. People complain that non technical people don't understand or value everything that goes in to our work other than 'writing code' -- look around, you are probably doing the same for other roles as well, including your 'bean-counters'.

I remember hearing the joke about "How do you make a startup profitable? Fire the CFO" because over-paid outside hired executives are bad for company culture.

The case I heard about, the CFO was was fixated on hassling people over business lunch costs (meeting with industry contacts etc.), and not creating value or the company or preparing the company for larger investors etc.

That's not how things work in reality. Look at the original post. The CFO was handling compliance with all sorts of insane regulatory minefields, the kind where a mistake can lead to the government destroying your company. No, a first-year accountant can not do that job.

But different jobs require different sets of cognitive biases. The ability to handle the regulatory compliance is very unlikely to reside in the same brain as the ability to understand that cutting small perks costs more in morale than it saves on the budget, so if the CEO isn't keeping the CFO on a leash, the CEO is not doing his job.

I remember being told that one of the CEO's of British Telecom is said to have said to his CFO "thank you for telling me what the cost of things are but I know the value of them"

Ironically BT a huge company started to go towards free tea and coffee but this was stopped by HMRC (the taxman) who wanted to charge tax on this benefit in kind - and you think the IRS is bad.

"started to go towards free tea and coffee but this was stopped by HMRC"

That sounds like a cover story some accountant made up to justify penny pinching. I've never heard of stuff like that being taxed.

In The Netherlands, you are not allowed to give your employees free food. You have to charge them (a little), otherwise the IRS doesn't agree.

I hate this fucking excuse, and I killed it in my current company because it leads to administrative overhead and all kinds of bullshit discussions about who contributes how much, just to save a few bucks.

Yes, the company has to pay tax over the free food we give our employees because it's considered part of their pay. In the grand scheme of things: big fucking deal.

It's cool in a larger company where you have a well-stocked cafeteria where you can buy good food at heavily subsidized prices.

But in small companies this micro bean counter attitude in order to avoid taxes is actually more demotivating and divisive than not providing free food at all. Especially if you're in the middle of the city and people have dozens of options to go out for lunch.

Why can't IRS just tax employees as if they received whatever sum spent on free food as income?

Still much less hassle-free if you ask me.

Then you'll need to track exact value of food each employee spent, send them invoice and pay them the same amount each month to cover that amount. I can't see how that can be simpler than "free food".

I saw the letter on company letter head so I doubt HR/IR was lying - the cost of being found out woudl have been to great.

And HMRC have form in this area when the company had a high level query about some thing they wanted to implement HMRC said no - So the CFO implemented profit related pay which reduced the tax take as a fuck you to the taxman.

They really should be taxed in the US, too. They are compensation.

The IRS has a guideline that says (not exact words) "if it's too petty to keep track of, like someone using the Xerox machine for personal use, don't worry about it." Free cans of soda probably fall in that petty category.

Here in Brazil such kinds of compensation are explicitly non-taxable. The employer can even give it in an specific moretary instrument (not money, but something traceable), and won't pay taxes over it.

When? Food and drink are considered non-taxable benefits according to HMRC:

http://www.hmrc.gov.uk/payerti/employee/changes/new-benefit....

It's always been non-taxable as far as I can remember and a quick google is not bringing anything up.

I think you might be confusing the fact that [non luxury] food and drink are [generally] zero-rated for VAT purposes with the assessment of a value for food and drink provided as a "benefit in kind" for income tax and NICs purposes.

That said the online guidance on what counts as a trivial benefit, http://www.hmrc.gov.uk/manuals/eimanual/EIM21863.htm, says:

>"Tea and coffee

>An employer may provide its employees with access in the workplace to tea, coffee or water from a cooling dispenser. If this refreshment is available generally to all employees, the benefit is exempt from charge (EIM21670). If the exemption does not apply, you should accept that these refreshments represent a trivial benefit." //

But it very much depends on how the benefit is provided, voucher schemes work differently and there is an assessment of the value of the benefit involved.

Other references:

http://www.hmrc.gov.uk/paye/exb/a-z/a/ http://www.hmrc.gov.uk/paye/exb/a-z/m/meals.htm

No, I'm not confusing anything, I'm not talking about VAT at all. I'm talking about the pretty explicit guidance on the page I linked. And rather ironically on the pages you linked. No income tax to pay on the benefit.

Read the parent I replied to. He was claiming HMRC was trying to get BT to charge income tax for a benefit of tea and coffee.

I challenged it because I was interested if this was ever true and also it's never good to let rumours like this to exist, the UK is a great place to start a business and misinformation like this shouldn't go unchallenged.

>He was claiming HMRC was trying to get BT to charge income tax for a benefit of tea and coffee. //

The page I linked says that it's not normally the case. But it's clear in the guidance that a not unusual construction of such a scheme, eg using vouchers and an external provider, would make it that tax/NICs were due on the hot-drinks a a benefit-in-kind.

It's not provably misinformation but it is deficient and doesn't demonstrate the verity of the claim.

Oh, the IRS is considering it too: http://www.mercurynews.com/business/ci_22982220/irs-is-looki...

I'll disagree that a CFO shouldn't have insight into company culture.

I think the problem with CFOs in general is they are just ledger monkeys - there's red ink and black ink. Development is always in the red even though it's the place where the real value is derived. So bonuses are an extraneous cost, food is an extraneous cost, healthcare is an extraneous cost. If you don't have a CFO who realizes that simple cuts to development, and all employees in general, will affect the black ink down the line, then you are in trouble.

>Dedicated CFOs and accounting types are simply doing their job. Their singular focus is often the bottom line and the company's financial health.

I disagree that anyone in a corporation should have a "singular focus". As an IT person at an investment bank I've seen numerous times IT people just "do what they're told to do" rather than offer a true consultative relationship to the business. A truly successful person realizes their limitations but offers reasonable suggestions on things that other people may have missed.

I used to work at publicly traded insurance companies and there was often a marketing vs. underwriting struggle but nobody on either side ever had a "singular focus" because it's the lazy way to bankruptcy for the corporation.