Essential Tips For Becoming A Well-Rounded CFO

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• Automation, BPA Software, Business Budgeting, Business Optimization, CFO

Major changes in today’s business landscape have opened the door for enterprising CFOs to achieve their full potential. The shift to an information economy, need for improved tech security, globalization of business, and increasing shareholder activism make it imperative for the chief financial officer to get involved in all aspects of company operations.

The role of a full stack CFO today calls for a well-rounded, strategic individual. Whether you already hold the CFO position or have that as a goal for your future career, it’s time to start cultivating the traits, skills, and knowledge that will make you a CFO for the modern world. 

Extensive Duties of a CFO

It used to be that CFOs were almost exclusively concerned with financial matters. They’re responsible for presenting accurate financial reports and providing timely information regarding company finances in the past. They’re also responsible for the company’s present financial information, and typically make decisions regarding investments. And they’re responsible for future projections, budgeting, and financial forecasts.

This barely scratches the surface of all a CFO’s responsibilities. But it does give you a good idea of the scope of projects the CFO handles. Finances are an integral part of any company. And the more interconnected a business gets, the more influence a CFO will have on departments that aren’t directly under their control.

The Need For a More Involved CFO

In July 2016, CFO Magazine published an article stating that “Four major disruptive changes in the past several years have coalesced to create an environment in which CFOs can excel as strategic thinkers.” We touched on these four major shifts in the introduction, but let’s expand on how they affect CFOs.

• The “Instant Information” Economy — An interconnected information economy with fast new software means business models are changing rapidly.  And that means the CFO has to be ready to help their company respond to shifts in new information.
• Need For Advanced Security Technology — Protecting company information from cyber-attack is largely the CIO or CTO’s responsibility. But with more and more safeguards required, the amount of many spent on catching and preventing attacks keeps rising. This makes cyber-security the CFO’s problem as well.
• Globalization of Business — The rise of competing businesses outside the United States means the CFO has to develop a global perspective on company finances. There’s a good chance they’ll become involved in their organization’s relationships with overseas competitors and/or with international vendors, suppliers, and customers.
• Increasing Shareholder Activism — Shareholder activism is “an umbrella term for movements which encourage businesses to consider ethics as well as profit.” This means a CFO’s responsibility to shareholders is no longer limited to making money. They’re also responsible for how the money is made and how company finances are used.

Modern CFO Roles

These four changes make it important for “the finance chief to be involved in all aspects of the company’s operations”. The article in CFO magazine ties this new focus to the “the rise of the “strategic CFO” — a leader with an external rather than an internal orientation who thinks forward rather than backward. The strategic CFO also focuses on the business first and then the financials, rather than the opposite.”

Today’s full stack CFO functions as a strategist, a financial steward, a catalyst for change, an efficient operations manager, and an expert on financial technology.

Strategist

A strategic CFO needs a thorough understanding of where the business is headed and what the company’s financial goals are. They’re constantly learning, assessing risks, and developing a future-oriented mindset. As modern CFOs take on the role of strategic business advisers, better analysis and reporting becomes a top goal. In 2017, more than 90% of over 380 finance executives polled said that they need to focus on using financial and operations data to help top-level management in making critical decisions. And over 70% said that supporting decision-making is their number-one goal.

Steward

Modern CFOs play a stewarding role as they actively guide, manage, and direct finances within an organization. As a steward, the CFO manages investments, provides transparency into the organization’s finances, and supports their controller by promoting rule compliance. The CFO also leads the way into a culture of transparency, rule-following, and responsibility to employees and shareholders alike.

Catalyst

CFOs are in a unique position to have a deep understanding of business operations. This makes them a valuable asset in deciding what the company’s next steps should be. If an organization just thinks of the CFO as someone who gathers data and writes reports, they’re missing out. Modern CFOs can act as a catalyst for change within their teams and in the business as a whole when. But only if the company will tap into their potential to map future business progress.

Manager

Project management isn’t really part of a CFO’s job description. But when business operations fall behind schedule and over-budget, then operational efficiency becomes a financial issue. An operations-minded CFO can offer perspective on managing key business processes more efficiently. They can work with department heads to keep employees motivated. They’ll also assess which processes work and which ones should change. And they anticipate change both within and outside the company.

Technologist

Investing in new technologies gives CFOs an opportunity to drastically improve business processes throughout the company. A technology-minded CFO works with the IT department, listens to employee proposals, and evaluates the current and potential use of technology. As such, it’s important that CFOs familiarize themselves with the types of process improvement technology that’s out there.

Cloud-based business process automation (BPA) software offers the technology needed to speed-up business processes, manage finances more accurately, and save the company both time and money. Savvy CFOs will recognize approving investment in BPA systems as an opportunity to make value-driven changes in the company. NextProcess offers a software suite that helps manage accounts payable, capital projects, expense reporting, and more. Contact us if you have any questions or check out our blog to learn more about the benefits of automation software.