Building The Future of Freelance Software / slashdev.io
Mastering Strategic Financial Leadership: Essential Skills for Today’s CFOs/
In the past, a Chief Financial Officer (CFO) focused on monitoring cash flow and financial activities, limiting unnecessary spending, and ensuring that financial decisions conformed to standard operating procedures. However, with the accelerating pace of business and technological advancements, the role of the modern CFO has evolved. A recent survey by consulting firm Accenture revealed that typical finance chiefs now spend most of their time spearheading company-wide efforts to transform and optimize business operations, with an emphasis on accelerating revenue and profit growth.
To become a strategic CFO who leverages technology and insights to drive growth and plan for the future, there are six skills you need to focus on:
Reporting and Forecasting
Reporting and forecasting are essential functions for a finance chief. With the proliferation of software as a service (SaaS) and cloud services, integrating powerful accounting systems across an organization has become easier and cheaper. A functional CFO must ensure that everyone who needs access to these systems has been fully onboarded and is using them. A strategic CFO goes further by looking for opportunities to delve deeper into the information to surface actionable insights for the organization. For instance, a CFO could standardize accounting, operational, and financial reporting templates and the chart of accounts to establish a reporting calendar for providing the latest income statement, balance sheet, cash flow statement, and customer- and product-level segmentation.
Financial Planning and Analysis
A strategic CFO uses standardized databases and quantitative skills in financial planning and analysis (FP&A) to produce data-driven answers to financial and operational performance questions facing any aspect of the company. They take a more proactive approach than a functional CFO, addressing some of the same questions but with a broader focus. For example, a CFO could conduct a comprehensive profitability analysis of a company’s multiple business and customer segments to begin to answer broader strategic questions.
Risk Management and Mitigation
Today’s CFO must take a role in pushing teams across the organization to make risk assessments and regularly address questions of mitigation. CFOs need to see risk management through the prism of opportunity, looking for where it creates potential commercial openings. Integrating risk management into the company culture lets CFOs reduce or neutralize risks and create commercial opportunities for sales and marketing teams to increase market share.
Automation can aid the finance department as it deals with the constant cycle of work spiking within tight timetables. CFOs can lead the way by automating back-office operations to free employees from repetitive tasks while saving time and money. CFOs can examine ways to automate monthly closes, urgent analysis requests, and the crunch period around mergers and acquisitions.
Talent and Culture
CFOs can take a more strategic role by becoming more directly involved in recruiting and cultivating talent. They can partner with HR to create opportunities to bring high-performing financial talent into the organization. A CFO can contribute to the company’s long-term strategy by securing an employee who can steer the company in a post-sale future.
CFOs can use their hard data and empirical mindset to contribute to the transformation of a company’s commercial goals or capabilities, for instance, by championing acquisitions or introducing partnerships to extend competitive advantages.
The role of a CFO has evolved, and becoming a strategic CFO is more demanding than ever before. As a CFO, focusing on existing finance capabilities and responsibilities, such as reporting and forecasting, financial planning and analysis, risk management and mitigation, digital transformation, talent and culture, and strategic planning, can elevate the role of CFOs to deliver strategic insights and drive growth. The strategic CFO is uniquely empowered to help their company transform and grow for the future.