There’s A Lot More To It Than You Think
The role of a business’s chief financial officer (CFO) has changed dramatically. In the past, a CFO had three key jobs to handle: tax compliance, financial reporting and maintaining the books for the business. They were typically seen as “number-crunchers” who made decisions based solely on managing costs. More often than not, any important decisions related to the overall business strategy were left to the other senior executives.
Today, a CFO’s responsibilities encompass so much more. The CFO is no longer an overlooked support function. Rather, they have strategic significance to many business operations. With the continuously changing business environment, the role of the CFO is even more important today because they have a direct hand in guiding the business to success.
The Current CFO
As previously mentioned, the CFO role used to largely be ignored and didn’t play an integral part of a business’s overall strategic direction. This has all changed. The CFO of today has adopted more important responsibilities within a business. Now, the CFO’s role is much more dynamic as they are expected to understand the entirety of the business, find creative solutions, and be able to create lasting value.
Take a look at the following fundamental skills all current CFOs should possess:
- Business Strategy Support – The CFO now has an integral part in ensuring a business strategy can be properly funded. Their skill-set can be used to analyze trends, building predictive financial modeling, and using non-financial data.
- Leadership – Communication and leadership skills are a must for a current CFO. Being a trusted advisor and level-minded when faced with business decisions is also critical of the role.
- Risk Management – CFOs are usually tasked with assessments, risk mitigation, and maintaining compliance with ever-changing regulations. They need to understand the business’s risks and the impact financially. Having a sound internal controls system for financial reporting is imperative.
- Understand The Business – Knowing the business’s goals and the industry trends are necessary for success. Having the skill-set to analyze data and provide recommendations that result in action and decision-making is crucial. A current CFO needs to be able to identify opportunities for growth and enhance profits through non-traditional means.
Overall, a CFO needs to be visible, have influence, and communicate effectively. Furthermore, finance cannot be relegated to a single area of the business and should be influential across all aspects of the operations.
A CFO must analyze and compute complex financial statistics to provide valuable business insights. That’s why investing in and embracing technology and automation continues to be important for CFOs in all industries. I can’t stress enough how vital it is to have quick access to data on a consistent basis. Any successful current CFO should happily welcome automation and new technology because historical data and results aren’t enough anymore.
In The Future
The role of the CFO won’t be slowing down any time soon. That’s why it’s important for them to continue to advance their skill-sets and maximize their value by embracing the latest technology. The expectations of CFOs are increasing as financial demands continue to weigh heavily on businesses. Additionally, successful CFOs will find and retain top talent and continuously develop, mentor, and lead their employees through every level of finance in the business. The best CFOs always have a strong team around them.
If you need help with CFO responsibilities, contact the client advisory services team at Rea & Associates. We understand how businesses operate and can help find the right solutions for you. Contact us today.
By Matt Long, CPA, MT (Wooster office)