Once upon a time the role of CFO was focused on backward-looking data. However, these days, chief financial officers do a great deal more than financial reporting. Along with tracking cash flow and providing timely information, the best CFOs are strategizers, analyzing a company’s strengths and weaknesses from a financial perspective and helping direct decision making. In the age of COVID, strong financial leadership is more important than ever. Keep reading for best practices for impressing owners and employees alike as a new chief financial officer.
Marry Finance With Strategy
It’s not enough to provide accurate financial data. If you want to impress in your early days in the role of CFO, it’s crucial to find ways of closing the gap between finance and strategy. Rather than simply providing data on company finances, savvy CFOs seek out ways to participate in strategy conversations and weigh in on decisions at all levels. In some cases, the CFO is the only one poised to offer financial implications and realities, potentially preventing businesses from making expensive mistakes.
Master the Art of Analytics
Of course, input is always better received when there’s data behind it. As a CFO, you can better achieve your goals by focusing on numbers and analytics. Before sitting down with CEOs and other decision makers, do your homework to ensure you have the data to back up your recommendations. Along with boosting the odds of you achieving your goals, creating a culture of data may inspire others in your organization to follow suit. The end result is that the companies waste less and grow revenue faster and more efficiently.
Learn to Collaborate in the Role of CFO
Just because CFOs are experts of analytics doesn’t mean they can afford to let their soft skills fall by the wayside. If you want to impress in your new job, mastering the art of collaboration is key. Start by keeping executives and department heads informed about what’s going on in the company from a financial perspective. Not only will their support make it easier to achieve your goals, but the feedback you receive can also help you avoid potential pitfalls. After all, the last thing you want is for your actions to have a disruptive effect on other areas of the business. Additionally, keeping others updated on how the project is developing can create good will and increase the odds that they’ll be on your side down the line.
Talk to Employees at All Levels
CFOs often make the mistake of dealing only with upper-level team members. However, if you want to help your new company make the smartest financial decisions, it’s important to seek employee input at all levels. Along with sourcing invaluable insight from those in the trenches, engaging with a wide range of workers allows you to speak to them about company objectives. As a result, employees will be working toward the same goals as the decision makers and stakeholders.
Very few financial decisions are entirely without risk. However, it’s the CFO’s job to assess a company’s financial future and help navigate risk as much as possible. One of the best things you can do as CFO to protect your new company is improve your ability to forecast risk accurately. Along with limiting risks related to debt, cash flow, mergers and acquisitions, CFOs seek to mitigate operational risk arising from supply chain issues, personnel problems, competency, and IT. Additionally, CFOs should be aware of the current social and political circumstances, from COVID-19 concerns to issues stemming from foreign wars.
Once you’ve identified potential financial risks, you can strategize the best risk management solutions and start putting them into action. Begin by evaluating the type and scope of risks faced by your business. Then, you can evaluate the odds of these events occurring and take the actions necessary to protect the company going forward. In the role of CFO, it’s a good idea to set up a process for regular reporting on risk exposure, so you have an early warning signal before disaster strikes. You may also want to evaluate different insurance coverage options to ensure you have a strategic, operational, and financial response in place should a loss occur. The last thing you want is for your company to be caught by surprise.
In a post-pandemic landscape, financial scenario planning will continue to be of the utmost importance. The good news is that Centage has the resources and tools to help a wide range of organizations prepare for every circumstance. Sophisticated tools like Planning Maestro make it possible to deliver accurate forecasting with unprecedented speed, shining a light on existing problems and identifying issues coming down the pipeline. You can find out how, when, and why actuals differ from plan and make the right choices for your business.
Centage Corporation’s Planning Maestro is a cloud planning & analytics platform that delivers year-round financial intelligence. With Planning Maestro, Centage offers the sophisticated features needed by small and mid-market organizations to integrate budgeting, forecasting, and deep data analysis within one easy-to-use, scalable SaaS solution. For more information on how to modernize your office of finance with intelligent planning, view our product demonstration video, or call 800-366-5111.