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Week 321 | Entrepreneurship Section | 1
Extractive summaries and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Since September 2017 | Week 321 | November 3-9, 2023
6 Things to Expect From the Best CFO
By Mackey Mcneill | Inc Magazine | October 31, 2023
Extractive Summary of the Article | Listen
As business owners, we’re experts in our industry. But we’re rarely experts in every moving part required to run a successful company. So we do what any wise leader does: We bring in experts to supplement our skillset. Then, they hire the one who’s likable, who seems trustworthy, who they “click” with. But likability, trust, and compatibility are important when building a team. But just because someone’s easy to talk to and has integrity doesn’t mean they’re good at their job. And it certainly doesn’t mean they’ll deliver the data-backed insights needed to make smart financial decisions for your company, if you need a Chief Financial Officer. Six things that every top-notch CFO provides for their clients.
- Data presented as trends and patterns. The best CFOs don’t just provide accurate data for your review. They present data in formats that bring meaning to the numbers. Instead of a slew of spreadsheets, they present data in pictures and trending lines so you see how your business is doing.
- Efficient annual planning that engages your team. If your CFO has one or two meetings with you to learn about your organization, heads back to their office, and returns with a fully finalized plan for you to implement, they’re setting you up to fail. CFOs partner with business owners (and often their entire team!) to develop an annual plan that’s focused on your goals and dreams. Remember, it’s your plan, not their plan.
- Accurate forecasting. CFOs shouldn’t limit you by only providing historical data. We wouldn’t drive a car 90 miles an hour looking solely in the rearview mirror, and the same goes for your business. The best CFOs forecast, so you can run scenarios and anticipate how decisions and changes will impact the financial health of your company.
- Alignment of financial data with your strategic goals. First-rate CFOs are dot connectors. They take the numbers and present them in conjunction with your goals, objectives, and strategic plan. Not every year will be about exponential growth, sometimes you’re ramping up for the next big thing. The best CFOs help you remember this. They keep your eye on the prize and they provide historical, present, and future data so you can move forward with confidence.
- Periodic in-depth analysis. The best CFOs can look at the data and tell when something is off. When that happens, they don’t just present the numbers and wait for you to raise an alarm. Top-notch CFOs understand how data can reveal red flags. When they see something that feels off, they roll up their sleeves and dig deeper to understand what’s going on and why you may be off track in meeting your financial goals.
- A consistent reporting cadence. CFOs should hold you accountable for reviewing and understanding the data that drives your business. They meet with you on a set schedule and they prepare you for meetings so you can come in ready to learn and ready to take action. A first-rate CFO treats financial coaching as an ongoing process.
3 key takeaways from the article
- Business ownership isn’t for the faint of heart. It demands risk-taking, vulnerability, and constant decision making. As business owners, we’re experts in our industry. But we’re rarely experts in every moving part required to run a successful company. So we do what any wise leader does: We bring in experts to supplement our skillset.
- But just because someone’s easy to talk to and has integrity doesn’t mean they’re good at their job. And it certainly doesn’t mean they’ll deliver the data-backed insights needed to make smart financial decisions for your company, if you need a Chief Financial Officer.
- Six things that every top-notch CFO provides for their clients are: presents data as trends and patterns, does efficient annual planning that engages your team, forecasting accurately, align financial data with your strategic goals, conduct periodic in-depth analysis, and should have a consistent reporting cadence.
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Topics: Entrepreneurship, Financial Management, Decision-making, Strategy