For many accounting and finance professionals, being a chief financial officer (CFO) is a career highlight. However, getting there is only the start of the journey. With seemingly endless options and the remarkable shift brought about by The Great Resignation, many people are venturing into new c-level roles or industries for the first time.
Taking that next step towards the finance executive table, whether you have 10, 20, or even 30 years of expertise in finance, is no easy task. Nevertheless, the best way to learn the responsibilities and skills required of a CFO is to perform it. In the current, digital era, finance leaders must be adaptable, and the need to have an immediate impact is increasing.
In this post, we'll go over a checklist of seven things a new CFO should accomplish in their first 90 days to help the company succeed.
1. Dive into your company’s industry and customer base
You probably got a head start on this during your interview, but you still need to know the ins and outs of the company's business as well as the customers you'll be serving. After all, one of the primary solutions to grow revenue is to grow sales from new and existing customers.
Finance, as the governor of strategic conversations, must have a thorough awareness of the customers base demands, what motivates them to rely on your company, and what challenges you are solving for them. You'll have to look beyond the numbers to get this information.
Sales and marketing executives, for example, will be intimately familiar with your company's value propositions and differentiators. Connect with the heads of your sales and marketing departments, as well as the budget owners, to learn what works and what doesn't. These specifics will provide much-needed context for the metrics you're trying to regulate or enhance. When it comes to the annual budgeting process, building a rapport with these department heads will go a long way.
2. Get to know your finance and accounting team
As a CFO, you are the leader of the finance function, and as a leader, you should seek to be a resource to your team. Having an initial one-on-one meeting with each team member is a fantastic place to start, followed by deciding on a suitable cadence for continuing meetings bi-weekly or monthly. The cadence will vary depending on the size of your company and finance department, and you may not be able to meet with dozens of employees every couple of weeks. Nonetheless, make connecting with your team a priority and strive to lead with empathy.
3. Familiarize yourself with the management team and board
Keep in mind that finance is the most cross-functional business area of a company. You collaborate with each business unit to acquire insight, centralize data, and create budget and forecast deliverables. As a result, you must comprehend each executive's job within the company.
Consider the CFO's role as a mixture of problem-solving and business management. You should familiarize yourself with the board and the reasons for their presence. Some participants are simply experts in their fields who want to contribute their thoughts and tactics. Some are the genuine proprietors of the business and are just interested in the numbers. When the board votes on decisions, you'll be glad to have a supporter on your side.
4. Evaluate current financial processes
Although number four on the list, this one could be a standalone white paper or blog post in itself. A great starting point is to verify that you have control over both your financial and operational data. Company data is siloed in multiple systems, making it difficult for finance to get access to the data it needs.
Individual business units employ sources of truth like Salesforce, HR software, and your ERP, such as Netsuite, which don't offer out-of-the-box integrations with each other. Instead, finance must track down these data sets, request specific files, obtain access through IT, and manually export unstructured data for usage in Excel.
This traditional approach to finance affects your team's valuable capacity, which may be better spent on more strategic and valuable initiatives. Improving your processes is achieved by a combination of proven methodologies and finance tools to optimize efficiency.
Budgeting and resource allocation are two processes worth mentioning. This can be a pitfall for many companies, particularly those who have recently secured a round of funding to help them scale. There's a lot to achieve and a lot of exciting things that can happen with additional resources, but this is where the budget comes into focus.
For example, an annual budgeting process forces department heads and management to make decisions on resource allocation for the best results the ensuing year. Even if you prefer rolling forecasts, they should not be a substitute for an annual budget. From your annual budget, management then meets as a group and decides on strategies and targets for department heads to implement, while finance monitors progress and provides visibility so everyone involved knows where they stand - similar to a scoreboard.
5. Assess the output of the Finance Function
Within a finance function you have two distinct divisions, accounting and FP&A. Accounting is essential, therefore you should devote enough effort to it to ensure that transactions, debits, and credits are properly recorded. Like a pyramid, FP&A builds on top of this. Accounting must function properly in order for FP&A to plan and forecast effectively. When it comes to planning and forecasting, you regularly need past data, thus if your past data is incorrect, you won't be able to forecast accurately.
Ask yourself the following questions to put your new finance function to the test and optimize it:
What is the quality of your closing process?
What is the reporting process like?
What reports are expected from management and the board?
How often and detailed are you forecasting?
What is the company’s approach to budgeting?
6. Determine what this business can become and how you can get there
It's taxing to sit at the head of the finance table (no pun intended). It’s difficult to try and please each business unit as much as possible. You want budget owners to watch out not only for what they think is best for their department, but for the company as a whole, and how finance can help. To succeed, there must be a sense of accountability, effective communication, and a common vision.
Successful CFOs see what a company can become in the future and lay out a plan to get there. You'll be well on your way to presenting the required levers to pull if you obtain control of your financial and operational data, identify strengths, weaknesses, and opportunities. This can be an exhausting endeavor, but it will produce the greatest positive outcomes. Nothing good comes easy, right?
7. Leverage CFO tools and software
If you're having trouble acquiring control of your data and running an efficient finance operation, additional tools can make all the difference. Finance professionals are all too familiar with the many joys and frustrations working with Excel. It's an excellent tool for processing and synthesizing small collections of data, but its limitations are unavoidable.
Eliminating manual tasks and automating as many procedures as possible with accounting and FP&A solutions allows everyone to do more and be more strategic. This is what is most beneficial for the business and where ROI is realized. FP&A tools also eliminate the tendency for manual errors. As your Excel worksheets grow, you'll find yourself referring back and forth between them, and eventually, an error will occur, and something won't connect as you'd anticipate.
Many times, errors aren't caught until they've progressed to the point where they've become more integrated and intricate. Automations, on the other hand, are flexible, and tools scale with your business, so you won't have to worry about errors creeping in your reports and analysis.