5 Ways a CFO Adds Value - The Strategic CFO® (2024)

FAQs

5 Ways a CFO Adds Value - The Strategic CFO®? ›

CFOs should use reporting and forecasting tools to make strategic, data-backed decisions, and provide level-headed insights based on a thorough understanding and analysis of the data. Additionally, it is important to focus on more than just numbers.

CFOs should use reporting and forecasting tools to make strategic, data-backed decisions, and provide level-headed insights based on a thorough understanding and analysis of the data. Additionally, it is important to focus on more than just numbers.

“Key for the CFO is creating the financial flexibility to weather financial storms and exploit opportunities – everything requires funding.” There is then the need to ensure that there is alignment between management information, objectives, key performance indicators and incentives with the strategy.

Finally, a successful CFO has strong values that lead their decision-making. They know that their decisions need to be in line with their company's culture, and they make sure they always act in the best interest of their employees, shareholders, and customers.

You can count on your CFO to help influence strategic decisions around pricing, assisting with any commercial negotiations, ensuring you have the right financial infrastructure in place to support the new opportunities, and defining what success looks like.

The CFO can Improve Company Profitability

Controlling costs, improving productivity, and analyzing and suggesting pricing strategies are three ways the CFO can impact the bottom line. Through oversight and management of the financial departments, the CFO has access to past and current financial reports.

What does strategic planning entail for a CFO? As CFO you're on a mission to haul the business from where it is today, to the brave new world of tomorrow. To do so, you're going to have to take a holistic approach that considers the market, your competitors, internal ongoings, and future goals.

Short-Term vs.

Simply put, operational finance cares about the company's present and how the operations affect the bottom line. Conversely, traditional strategic finance focuses on the company's long-term growth. It accounts for the possible changes in the market and aims to map out risk for future plans.

Strategic finance includes value-added problem-solving, identifying growth initiatives, and collaborative decision-making to reach strategic business goals. The role of the CFO is evolving into a strategist, intelligent automation technology champion, and major contributor to business results.

Leadership skills

Today's CFOs are expected to envision, understand, and work toward the bigger picture. To achieve this, they engage in tactical problem-solving, make crucial decisions, and manage relationships with stakeholders. This altered CFO role relies heavily on one vital skill—leadership.

What is the value proposition for a CFO? ›

The CFO value proposition is simple: they are the financial leader of the organisation who provides critical insights, analysis, and decision-making support to help the company grow and succeed.

Of course, trust is typically earned, not given. They should demonstrate trustworthy behavior—actively listening, adhering to commitments, and taking responsibility. More than any other relationship in the organization, ongoing trust between the CEO and CFO is essential.

The most effective CFOs encourage behaviors for profitable growth among the CEO and board, and meet the CEO's financial performance expectations. They get involved in business-level issues and become personal champions of strategic initiatives that advance their agenda.

Responsibilities of a CFO

Financial Planning and Analysis: The CFO oversees the financial planning process, including budgeting, forecasting, and strategic planning. They analyze financial data to provide insights into the company's financial performance and future prospects. 2.

The CFO helps with shaping portfolio strategies, undertaking major investment and financing decisions, and communicating with key stakeholders—all while leading a multitalented and technologically savvy finance team. Communication is a key part of the role, both with investors and boards.

A CFO utilises financial data to evaluate the company's financial performance, identify trends, and assess growth potential. Through comprehensive financial analysis, they provide insights into profitability, cost optimization, and investment opportunities.

CFO: For a large, established business, a transformational leadership style is highly effective. This style focuses on inspiring and motivating employees to exceed their own expectations and capabilities, which is crucial for sustaining growth and innovation in a mature company.

Teamwork is key for the modern day CFO. As well as the ability to build their own team, highly effective CFO's must be able to work effectively with the management team of the business and develop relationships outside the business to provide a strong network of support professionals.