As the role of the chief financial officer continues to evolve, the most effective CFOs are those who continue to add value beyond the traditional finance function and help deliver strong business results.
Today’s CFO is responsible for far more than just accounting, which has made the job progressively more complex and challenging.
The CFOs making the most impact are those who have a vision for the company’s future growth and drive innovation.
These days CFOs must develop expertise in areas such as implementing new technology, managing an increasing amount of risk, understanding analytics and managing data. In addition, they’re expected to play an active role in helping to enhance profitability and competitiveness.
As owners of the entire financial process, CFOs are responsible for all aspects of financial controls such as cost cutting, treasury management, sourcing, procurement and invoice automation. He or she must also ensure the company’s compliance with financial and regulatory reporting requirements.
Knowing the financial tools of the trade, which are becoming more technologically sophisticated by the day is imperative. Financial reports must be generated accurately, as always, but more quickly than ever before.
Adapting to new technology is one area that brings both challenges and opportunities. It can be a time-consuming and expensive endeavor, but one that cannot be avoided for any company to remain competitive.
Our client Dave Templeton, CFO at Central Valley Builder’s Supply, embraces new technology to ensure the company continues to provide outstanding local service, selection and pricing.
He recently led the effort to bring an enterprise resource planning (ERP) system to the Napa-based company founded in 1955.
Moving to an ERP system is an enormous undertaking, but one that will pay off significantly through the streamlining of processes and information across the entire organization. Having real-time data from five stores is just one worthwhile benefit of this integrated system.
A CFO’s ability to collaborate with the CEO and other leaders is also important as companies look to identify new revenue streams. Evaluating the risks of making acquisitions, entering new markets and creating new product lines are areas where a CFO can be indispensable.
For example, when our client Aaron Webb, president of Purple Wine + Spirits was serving as the CFO, he played an integral part in the launch of the company’s craft spirits division, Graton Distilling Company.
Webb’s prior experience before joining Purple Wine + Spirits included sales, marketing, mergers and acquisitions in wine and spirits. His knowledge and expertise proved invaluable as the organization moved toward aggressively building its spirits portfolio and strategic brand building in the wine sector.
Other traits of an effective CFO include strong communication skills and the ability to listen attentively.
These attributes are important when there’s a need to get buy-in for new initiatives and explaining difficult decisions. Communicating concisely and persuasively is a must both inside the organization to the executive team and employees as well as outside to customers, shareholders, regulators and others.
Human resources is another nontraditional, but ever-increasing area of responsibility for the CFO.
For many organizations, human capital is the most critical asset.
Smart management of staff resources can be both cost efficient and an important strategic activity. By working closely with human resources to set policies, CFOs can weigh and better manage the long-term needs of the company, attracting and retaining talent, risk tolerance, productivity concerns, and the cost containment of benefits and associated expenses.
Michael Silva is regional president for the San Francisco and North Bay Markets at Comerica Bank. Silva can be reached at 415.477.3274 or firstname.lastname@example.org.