It’s always interesting to read articles written about trends in one’s profession — for us, that’s the broader group of CFOs. Recently, Scott and I came upon some statistics published by Gartner: it reported that only 30% of CFOs and CIOs who work together in the same organization report having a “collegial” relationship. (For a link to the article click here).
The success of a company, especially a start-up or small business, is directly impacted by how well the leadership communicates — we know this to be true. These stats illuminate another truth that AcceleratingCFO affirms each day with our clients: as CFOs, we need to have, at minimum, a solid understanding of the company’s key functions, listed below, in order to make the most beneficial and impactful decisions.
- Technology: Most CFOs have to truly understand technology and the underlying impact on the policies and procedures of the business. Besides saving money, tech functions can also provide operating information and data that will help business owners run the business. CFOs must understand the nuances of various products, from ERP systems that integrate all of the key financial information to inventory tracking systems that allow companies to get real time information on sales.
- Human Resources: Many businesses structure their org chart so that the head of HR reports directly to the CFO, especially because salaries are often a company’s top expenditure. CFOs understand the overall strategy of the company and can help determine if it makes financial sense to hire for a department. There is a level of discipline and financial oversight that is necessary to make sure that salary expense is under control.
- Marketing: In our experiences, marketing has been one of the more challenging areas to not only control expenses, but also justify spending. CFOs have to derive the return on investment for marketing spend and determine if the company is going down a rabbit hole or just missing key segments of the market. Marketers tend to want to spend first and measure later; but, CFOs measure twice and cut once to make sure that the company is wisely spending its marketing dollars before, not after, the campaign.
- Process optimization: CFOs must constantly challenge the way that key departments function, from buying raw materials to collecting the outstanding receivables — and everything in between. This means challenging the daily status quo, particularly to increase automation. This does not often make the CFO the most popular person in the office, but positive cash flow and a healthy business make it worth it in the long run.
- Logistics: This is a really hot topic right now considering the impact of COVID on the global economy. As the CFO, it is important to mitigate the risk of not having key goods and materials available and to ensure the critical path for acquiring and manufacturing goods.
There are other areas that CFOs need to understand as well, but I think you get the gist. CFOs need to be knowledgeable across a wide range of topics — a successful CFO is a well-read and intelligent person. Our team continually strives to increase our knowledge; and as we do so, we find creative and innovative ways to improve our clients’ bottom line.
Take-away: Having a well-rounded CFO is important to any company that is trying to get to the next level. To determine if your company could use some improvements in your processes and procedures, contact Brian or Scott at email@example.com for a free diagnostic.
Co-founders & Managing Partners