A modern-day Chief Financial Officer (CFO) holds a vital position in a company. The CFO leads on both financial and operational decisions that drive the business and is more than a finance manager.
Working as a cash flow expert, CFOs also don the responsibility of managing the growth and tracking the performance of the finance team.
As a result, it is critical for a CFO to ensure that the finance team understands the nuances of the industry and the macro factors impacting decisions. Listed here are some dos and don’ts which they need to advocate to their team.
For a finance team, it is all about building relationships, while still acting as the guardians of financial information. CFOs must encourage their team to build healthy connections with stakeholders, including investors, board members, regulators, suppliers, customers, and company employees.
Finance teams should collaborate and communicate with a diverse range of stakeholders. This can be both demanding and rewarding. It is vital to build strong relationships with other stakeholders to create a win-win scenario for everybody involved.
Business intelligence is a critical part of the finance role in any organization. Data helps understand what the strengths and weaknesses are and how the company can evolve.
As a modern day CFO, you should train your department to be in touch with the leadership teams to understand what is going on. Doing so will help your team make better decisions for the company and avoid being blindsided. Encourage your team to gather business intelligence from leadership teams, customers, and competitors.
One of the most crucial responsibilities of a CFO is to be involved in different business aspects of the company. The finance team can start by speaking with the leadership divisions on the day-to-day business operations.
They need to have healthy cross-team collaboration to manage the company’s finances and operations in a way that creates value for all stakeholders. As a CFO, you are in a position to drive this because of the access to different departments. When the team has insights into varied business aspects, they will be able to devise ways to operate the company at peak efficiency.
The role of a modern-day CFO is no different from being an effective communicator whether communicating externally or internally. The CFO must articulate company strategy and build an understanding among the team about the vision and goals. Let them spend time on external relationships, and invest time in building healthy internal relationships.
In addition to being a good communicator, the team must be versatile and presentable to convince and impress different stakeholders. They must also be flexible, proactive, and adaptable to maintain sustainable value for shareholders and stakeholders.
We live in an age where new technologies transform every field and industry with such rapidity that it is difficult to keep up. A modern finance team automates tasks by using data analytics software and artificial intelligence solutions.
As a leader among the C-suite group, the CFO should guide their team to set aside funds for fresh talent who keep up with the business trends. Your team needs to keep seeking technology that will enable them to optimize mundane tasks and move towards strategic work.
There are many reasons why the CFO and the finance team should not get negative about cutting costs. Cost-cutting measures can lead to harmful consequences like layoffs, reduced morale, and low productivity, among other things. Guide the team to be mindful in managing the budget and ensure they develop a plan for both short-term and long-term profit.
The old-school thought of a CFO vetoing all ideas because they were not worth the time or money is proven wrong. If the team presenting the idea feels passionate about it and has thoroughly researched it, then it should not be rejected.
A modern day CFO and the finance team should be an advocate for innovation because it is what makes a company thrive. The company will not grow if the team does not have room for creativity and innovation. It is one of the most important qualities that a CFO can encourage their team to help the company grow exponentially.
The pace of change is accelerating over time, with more change happening each year than in previous years. As a result, our world has become more uncertain and competitive than ever before. Some finance teams have stopped thinking about innovation or are unwilling to take risks for fear of disrupting core activities.
A modern-day CFO should guide the team to take creative risks to help the company grow. Creative risks can be complicated for the company, but if they are calculated and well thought out, they will reap unimaginable benefits.
Today, it is not just about the company anymore. It is about the whole industry and potential partners and competitors. CFOs must encourage teams to not miss out on networking opportunities with internal and external people. Networking is not a new concept but with the rise of digital technology, it is easier to connect with people from all over the world.
It helps to establish connections, open doors, create a strong reputation, generate ideas, find solutions to problems, and expand your professional network. The modern finance team should be networking with people both internally and externally to create a positive situation for all parties.
A finance team, as the guardian of the company’s finances, should be extremely cautious. The team needs to be guided on actively avoiding unethical or illegal practices as that could lead to serious consequences.
Even if the team is not intentionally doing anything wrong, their habits and behavior will affect the company’s reputation. It does not just mean breaking government laws but also violating ethical norms within a company. The CFO should ensure that the team is ethical in all aspects of their work.
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