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CFO - 7 min read
Once seen as an organisation’s chief accountant and bookkeeper, the role of a CFO continues to evolve along with changing industries. Instead of focusing exclusively on budgets and reporting, today’s chief financial officers add value to their companies in new and influential ways.
Today’s CFOs don’t just report numbers. They guide strategy and provide insights that allow senior management and the board to make critical decisions. The seeds for these changes were sown during the financial crisis of 2007-2008. Since then, many organisations have realised the importance of prudent money management and looked to their CFOs to steer their ships.
But what if your company isn’t yet large enough to justify hiring a full-time CFO? Or what if you haven’t been able to find the right person? In this article, we’ll look at ways the role of a CFO is shaping the future of finance.
In the past, CFOs primarily focused on accounting, reporting and bookkeeping, but today’s CFOs have a whole new realm of numbers with which to contend.
Companies now can collect an unprecedented quantity of data regarding their operations, supply chain, customer interactions, production processes and more. Companies need ways of analysing and processing all of this data if they want to be competitive.
Which person in your company handles analytics? More and more, this job falls under the duties of the chief financial officer. This makes a lot of sense. When one of the principal officers is well-acquainted with the company’s data and can help to steer strategy, a company is more agile and well-positioned to seize critical opportunities.
Not all data comes from the finance department, however. A well-run business will collect data from every division and department and use analytics to exercise more-centralised control of business decision-making. An analytics-armed CFO can answer specific questions like these:
Insights like these go right to the bottom line. Today’s CFOs must leverage data to keep their companies competitive.
A good handle on analytics gives a CFO the ability to provide strategic advisement, both on big-picture decisions and the minutiae of daily operations.
A good CFO knows that non-financial forces and factors affect a company’s bottom line, and therefore, deserve his or her attention. For example, a CFO may use surveys to ascertain how customer satisfaction affects future sales volumes. Scores could be analysed before and after marketing campaigns to determine the future best use of ad spending. In this way, the CFO guides strategy using quality data.
Another non-financial force affecting businesses is social media. CFOs can monitor the way their organisation is portrayed online and use this information to make expansion plans, launch products and even assist with hiring. While the marketing department will probably play the most significant role in social media marketing, a partnership with the CFO will make their efforts more productive and profitable.
With a bird’s-eye view, a CFO can glean insights from all areas of the company and offer strategic advice that crosses departments. For instance, the performance of a manufacturing plant could be compared with ambient temperature, leading to a suggestion of upgrading the air conditioning system for positive outputs. By bringing various sources of information together, a CFO can solve problems that department heads often can’t see due to their laser focus.
With project management software and other tools, most workers are now using digital dashboards of some kind to help us manage our day-to-day responsibilities.
Today’s CFOs develop sophisticated digital dashboards to help them monitor and direct operations at their companies. Many CFOs are also using collaborative tools to derive value-add suggestions from staff members.
Today’s CFO shows leadership by digitalising finance operations and moving finance out of “back-office” status. If your company is lagging technologically, you need a CFO that can lead the charge to implement new, digitally-enabled business plans and strategies. Digital monitoring can help business leaders to quantify intangibles like assets, customer relationships and human capital.
As you can see, today’s CFOs play an increasingly important role in guiding and steering their companies to success. And this is true for large companies as well as small ones. What can a business owner do when the company needs direction?
Outsource CFO services to free yourself from cash flow management, business reporting, technology solutions and other concerns. We can help with everything from the big-picture strategy to daily operations.
The role of the CFO has changed. To cultivate a competitive edge, embrace the future of finance. To learn more about outsourced CFO services, or to discuss any other business issues, reach out to us to set up a consultation.
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