7 Habits of Highly Effective CFOs
Before diving into the 7 habits of highly effective CFOs, it is critical to understand that contemporary CFOs differ from their traditional counterparts. CFOs are no longer just number crunchers for the company, shooting down innovative ideas and citing budgetary constraints. Their job is now about more than just internal controls, statutory compliance, financial reporting, and maintaining books and records.
Chief Financial Officers, or CFOs, are now taking on more in-depth and relevant roles in the rapidly advancing corporate ecosystem. They are involved with decision-making, strategy, and promoting growth.
So, what are the 7 habits of highly effective CFOs that can help them achieve their goals? As a CFO, how would you face the key challenges of the company’s day-to-day running and come out the winner?
#1: Make No Mistake. Number-Crunching is Still Relevant, But So is Ethical Accounting.
Balancing books and financial records is still a part of the CFO’s job description. What’s changed is that your input is invaluable for making crucial decisions that will impact the company’s financial health. After the recession of the 2000s and post-COVID economic upheavals, stakeholders now choose to rely on the CFO. This entity is the one reliable source of information inspiring continued confidence in the company and its growth.
Investors are more likely to trust the CFO, and your transparent reporting rather than the distorted details board members provide. In this respect, one of the 7 habits of highly effective CFOs is maintaining strict codes of ethics. You’re also responsible for compliance with government and bookkeeping regulations.
[monsterinsights_popular_posts_inline]
#2: CFOs Facilitate Long-Term Goals and Company Strategy
Earlier, CFOs worked with the available company data and created financial statements based on the information they received. However, the new CFO job description includes overseeing and supporting strategic planning driven by complex data.
You can provide valuable inputs on whether the company is financially stable enough to take the risks board members may suggest. You’ll play a pivotal CFO role in enabling the implementation and execution of corporate strategies. Your expertise is invaluable in estimating the company’s future financial needs without losing sight of its mission.
Interestingly, CFOs in the 21st century train with a global mindset and attempt to gain multinational and multicultural knowledge. You should be adept at interacting effectively with people from diverse backgrounds and cultures to infuse agility and adaptability. That’s how you can ensure the company’s future growth and stability.
#3: CFOs Have Exceptional Communication Skills
Excellent communication skills are among the most critical skills you’ll develop as a CFO. Expect to communicate consistently with stakeholders, investors, customers, and even human resources. Your job is to relay the company’s mission and goals to all vital audiences.
CFOs may interact and liaison with customers to understand their perspectives and plan the company’s activities accordingly. Thanks to your interpersonal relationship with the CEO and board members, you’ll take charge of delivering financial pitches, reports, and running operations.
Savvy CFOs frequently conduct one-on-one discussions with board members to understand their issues and concerns with achieving the company’s mission. You’ll develop close relationships with them, building trust, and setting clear mutual expectations. Also, build robust connections across all the company tiers, particularly with external stakeholders. That’s how you can acquire insights into the company’s performance that may not be evident from the financial data alone.
[monsterinsights_popular_posts_inline]
#4: CFOs Determine Opportunities Worth Exploring
A CFO’s role has always been about identifying the risks of every new proposal and strategy. Your job is to prioritize the company’s stability when determining which new opportunity is worth funding.
Using your expertise with numbers, you’ll build predictive models and analyze worldwide trends while incorporating non-financial data. Contemporary CFOs are no longer the naysayers. Instead, they evaluate each strategy based on its merits and potential for driving long-term profits and returns.
When each new opportunity arises, you’ll work out the possible benefits and profits for the company. Next, you’ll analyze the quantitative value it brings to the consumers and stakeholders while adding up the financial costs to the company.
You’ll use factual data to identify and minimize potential risks. Since your assessment is data-driven, you’re in a better position to determine whether the strategy is worth exploring and investing in.
#5: CFOs Are Mindful of the Futuristic Impact of Company Activities
Another of the vital CFO roles you can expect to play is to stay informed of upcoming market trends. With customers and stakeholders increasingly focusing on supporting green businesses, you’ll steer the company toward sustainability and eco-friendly products.
You’ll ensure that the company stays grounded and focuses on its social and environmental impact. Keep an eye on how the competition performs and ongoing changes in the political landscape that can impact government policies. Information like this can help you prepare the company for new and unexpected regulations. That’s one of the 7 habits of highly successful CFOs.
[monsterinsights_popular_posts_inline]
#6: CFOs Exhibit Great Leadership Skills
Interestingly, modern-day CFOs are actively involved in the hiring and recruitment process. You’ll look for candidates that possess the appropriate skill sets and experience to drive the company’s success. Also, look for additional soft skills like ownership, communication, work ethic, and dedication.
Using data analytic tools, you can zero in on people who are adept at using technology to assist you in acquiring and analyzing reliable data. Your focus should be on employee engagement and ensuring minimum attrition. To make that happen, you’ll devise fair compensation packages designed to recognize and reward performance and results.
Communication is again the key here. For instance, you’ll work with employees, structuring messages to explain upcoming changes within the organization. Such changes can center around acquisitions, mergers, expansion, or more.
You’ll also present numbers to explain how the changes will likely impact them and investors. Be mindful that one of the 7 habits of highly effective CFOs is to facilitate attracting and retaining top talent.
#7: CFOs Know How to Integrate Technology into Accounting
CFOs no longer function in dusty back offices managing books and files. Modern-day accounting integrates the latest technology and typically has data secured on pen drives. You’ll stay up to date with innovations like blockchain, cloud computing, and artificial intelligence to streamline your activities. Automated and reliable data for compiling reports is now available with a few clicks on the buttons.
At the same time, you must deploy cutting-edge cyber security solutions for protection from data theft and hacking. Potential leaks of company information and trade secrets are other threats you need to be mindful of.
You’ll do the necessary research to learn more about Enterprise Performance Management or EPM solutions. This software assists CFOs with budgeting, forecasting, and financial management. Using this tool will streamline data analysis and reporting to create reliable predictions.
[monsterinsights_popular_posts_inline]
How KayOne Can Help
If your CFO has these 7 habits of highly effective CFOs will help you fulfill your role as a key business partner. To make that happen, the CFO has to consistently evolve as a professional.
If you are entrepreneur looking to hire a CFO, take your first step towards financial effectiveness by hiring a Virtual CFO today. Our team of experienced virtual CFOs can guide you through the 7 habits of highly effective CFOs and help you achieve your financial goals.
