What CEOs Need from Their CFO

CEOs don’t have many people they can turn to when they need advice with financial management, honest answers, and space to discuss doubts about their company. That’s why they need a good chief financial officer on hand.

Just like a quarterback directs his team to score as many points as they possibly can, a CFO guides the CEO to make the most revenue from the company.

Of course, not all CFOs are created equal. The right person must earn the trust of their CEO for the relationship to work both ways. To do that, a CEO must look for certain skills and competencies when they’re hiring a financial executive.

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What Key Skills Do CEOs Need from Their CFO?

A CEO needs a CFO who has many vital skills to help grow the company. When it comes to breaking down the skills and abilities that CEOs require most from their CFOs, they generally fall into two categories. Those categories are hard and soft skills, both of which we will outline below.

Hard Skills

Hard skills come directly from years of training and experience with business finances and strategic planning.

• Tracking and analyzing cash flow management: This is one of the CFO’s most important roles, and it is essential for the CEO. A CFO is trained to assess cash flow and monitor the company’s finance and accounting department to instantly spot — and fix — any problems.
• Data and analytics management: Gathering and interpreting the company’s financial data raises the CFO from an accountant to an analytical strategist. Strategic use of financial data enables the CFO to keep the CEO informed of the viability of current and future business strategies. The CFO’s strategic ability will transform analytics-based insights into measurable results.
• Risk management: The CFO should be highly skilled at risk management to prevent the company from the influence of outside forces such as competitors or inside forces such as bad business decisions. The CFO should make sure that the business model is strong and resilient enough to withstand predictable threats.
• Technological expertise: The CFO must be tech-savvy to push business performance to new levels. According to Gartner, global IT spending within the business industry is set to reach $3.8 trillion this year. Meaning the CFO must recognize their role as an agent who drives technological transformation throughout their company.
• Financial planning and budgeting: A good CFO has the company’s most current financial data ready to create realistic budgets and short and long-term financial plans. The CFO must also keep abreast of continuous budgeting to stay ahead of changes within the company.
• Management of finance, HR, and IT procedures: The CFO should not only be in tune with the management of these procedures, but he or she should also be fully up-to-date with the technologies they are using. Access to this information gives the CFO the tools he or she needs to work across departments and divisions. For example, many CFOs take on budgeting for compensation and benefits as well as IT expenditure.

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Soft Skills

In today’s business environment, CFOs need more than financial and analytical skills. They also need to excel at forming and maintaining business partnerships.

• Management and leadership of the finance/accounting team: Leadership and people skills are integral parts of the CFO’s function. Leading CFOs have the soft skills required to drive creative thinking and engagement. For this reason, excellent communication skills are a top priority if they’re going to be leaders in a company.
• A strategic relationship with the CEO: The CFO needs to be a strategic partner but also a reliable accountability partner to the CEO. Meaning, they continually help the CEO drive progress for the company. The CFO must continually bring reality to the company’s management team, identify and measure the risks of their decision-making, and ultimately make sure that the CEO is accountable for meeting company goals and objectives.
• A deep understanding of company strategy: Each company has a unique business strategy based on the size of the business, budget, industry, and goals. An efficient CFO will know the company’s strategy inside and out. This strategic understanding allows him or her to prioritize business tasks and processes for the CEO and advise the CEO on strategies to get their goals while hopefully getting the best return on investment.
• An effective decision maker: A top-line CFO has the skills and experience to develop strategic planning and forward-thinking. The CFO must always be ready to implement changes within the company to prevent loss and produce growth. Adaptability is key to good decision making and will build trust with the CEO. At the end of the day, a strategic CFO plays a very crucial role in the CEO’s ability to make more informed and insightful [read: better] decisions, which is crucial during times of economic strain and uncertainty.

Read more: Outsourced CFO Services – Benefits of a Part-Time CFO

If you’re looking for a top-performing CFO but don’t have the time, budget, or desire to hire in-house, Signature Analytics is the go-to resource for outsourced CFOs. We provide professional, part-time CFO services, supplying your company with a Chief Financial Officer who is a leading expert in their field. We’ll match you with a CFO you can trust to provide the following: actionable financial analysis, cash management, forecasting, accurate reporting, high-quality business advice, and company risk management.

Contact us today to find out more about our finance professionals.