The role of the chief financial officer (CFO) has evolved with modern business requirements. Could you now benefit from their increased skillset? Here’s what the new, modern CFO can offer your business:
Once, chief financial officers were considered the ‘head bookkeepers’ or primary accountants for a business. This is no longer the case.
Perhaps the biggest change is that of the strategic focus of the modern CFO. Rather than simply collating and processing data into general reports and handing them off to the CEO, a CFO is now an intrinsic part of a business’ strategy development and implementation.
“A CFO must prioritise the strategy and growth targets within the boundaries of the financing and capital capabilities of the business,” explains Bellingham Wallace advisor Matt Smith.
CFOs nowadays assist with determining a growth-first finance strategy, dealing with risk mitigation as well as mergers and acquisitions. Long-term finance investments are also within their role, giving them the power to assist with creating a future-forward direction for the company they are in.
The CFO role doesn’t end at the strategy table, however. They also have significant operational duties, including oversight of the financial controller and general responsibility for all things financial within the business.
CFOs review capital requests, establish new lines of credit and loan as well as actively identify process inefficiencies and process the required improvements.
The CFO role doesn’t end at the strategy table
They are active in their business, taking ultimate ownership of all processes related to finance, but also help to drive specific initiatives through their manipulation of the business’ purse strings. If a project has the opportunity to be particularly beneficial to the business, they have the ability to direct more capital towards it to help ensure success.
IT and Data
A CFO is now expected to be fluent in a range of IT systems – both in knowing the existing capabilities of the software their company uses, and also in keeping their finger on the pulse of new digital developments in the company’s industry. By keeping up with technology, CFO’s can harness the potential of data.
This may be through using data visualisation tools to identify business intelligence that can be easily communicated at board level, with up-to-the-minute data feeding visualisations including graphs and charts that present results and trends in a more compelling format at a more granular level that hasn’t previously been possible.
Finally, there is the leadership role for a CFO. No longer is their job to simply be stuck behind a desk, collating information and analysing reports. They must be out and about just as much as other C-level executives.
No longer is their job to simply be stuck behind a desk, collating information and analysing reports.
They negotiate major contracts, present to directors and investors, provide guidance to other C-level executives (particularly the CEO), and generally work with internal and external stakeholders to improve the business on a financial and strategic level.
However, CFOs are also mentors. They work to develop the skills and talents of those at every level of the business, both inside and outside their own team.
In summary, a CFO is no longer merely the ‘head numbercruncher’. They are strategists, operators and leaders, communicators and catalysts. They are a part of any strong business team, working with other C-level executives to ensure the success of your business.