What to expect of your CFO?

We're all beginning a new year personally, but professionally too.  Others may be deep into their fiscal year.  No doubt the days are filled with challenges, problems, opportunities and decisions to be made.   Is there an effective partnership between the CEO, the CFO, and the senior management team?  What should an organization expect from a CFO?

I've identified a few matters:

1. Make complex simple - finance and accounting can be dry, boring and overwhelming to people that are simply trying to do their best in running an organization day in and day out.  A CFO should be able to reduce all the noise and help organizational leadership understand financial matters in an easy to digest way.  I've mentored a lot of people in my career, and I've always told them to "make the complex simple".  Very often if an organization gets into financial trouble, it's because of poor leadership and either intentionally or unintentionally ignoring the financial signs.  Your CFO should be a confidant and collaborative resource to help make decisions from a financial perspective. We as CFO's should be great communicators.  (If you happen to be a college student reading this, take a public speaking course!)

2. Help organization understand how to achieve it's financial goals - "It's not in the budget." Budgeting is an entirely separate subject, but I have a few very brief thoughts here. Unfortunately, sometimes the budget is seen as a tool to restrict bad behavior.  The budget should be supported by an achievable plan, however.  The budget is simply the quantification for your operating plan.  However, leadership should always be in tune to great business opportunities.  For example, a budget may include a planned expenditure. However, opportunities may arise to spend money differently that in the long run will save a company significant dollars.  Just because that expenditure is not in the annual budget doesn't mean it shouldn't be evaluated as a good opportunity.

3. Leadership and mentorship - we should always be working to replace ourselves and to help our colleagues be the best they can be and achieve their goals. The CFO should be in tune with their staff, to help them be the best they can be. 

4. Effective business operations - A CFO is responsible to oversee business operations in an efficient and effective manner.  Financial reporting should be accurate, mistakes kept to a minimum and assets safeguarded. The day to day operations of a CFO is likely more than just "debits and credits" but somebody has to think about these matters!  A CFO should ensure that good processes are in place to mitigate the risk of errors, theft, and intentional inaccuracies.  I've found that it's simply a matter of establishing specific processes to be followed in accordance with a prescribed timeline.  An effective system will almost certainly result in timely and accurate reporting, which will give company leadership the information they need to make quality decisions.

This is not a comprehensive list by any means but these items are a good start.  Do you see little value in collaborating with your CFO because they aren't helpful or too busy being in the weeds? Do you dread meetings with him or her because they talk in accounting mumbo jumbo?  Does the business office not seem to have a voice?  Does it seem difficult to obtain accurate financial reports in a timely manner? If you answered yes to these questions, then you probably have some hard decisions to make.  My experience is that company leaders that are experiencing these issues struggle with what to do.  Congratulations if these are not familiar issues!  I say, "life doesn't have to be that hard!"  Quality financial leadership can make a pretty big impact almost immediately!