5 Defining Characteristics of a CFO

You’re the CEO of a mid-sized manufacturer that you’ve built up over the years by dint of hard work, market savvy and your fair share of good luck. Your sales executive is doing her part; her people are driving revenue and they seem to be able to do it without giving away too much margin. Your vice president of operations keeps the lines running on time and on budget and customer satisfaction surveys give the company consistently high ratings on quality and service. Your vice president of finance seems to be doing a good job but it’s hard to judge because you came up through operations and accounting was never your thing.

Ready to Go But…

You’re ready to take the company to the next level but you’re unsure on how to go about it. You’ve canvassed your executive team for input on expansion plans.  Sales and operations assure you that they’re ready to raise their games and have some good ideas of how to go about it. However, while your chief financial officer assures you that the accounting department will keep up with any future growth, he doesn’t have any useful ideas on how he can impact that growth.

If this is sounds familiar, you are probably in a situation where your top financial person may carry the title of vice president of finance or CFO, but in fact they are functioning as a controller. And while they may be a very competent controller, a true CFO brings a whole different skill set to the table.

What to Expect from Your CFO

A fully functional CFO should be able to:

• Analyze financial information and tie that data to operational metrics so that the executive team understands the financial impact of operational decisions in real time.
• Assure that adequate capital is available to finance operations and finance plans.
• Act as your right hand, including being a prime advisor on strategic planning matters.
• Coordinate and quarterback growth initiatives including fixed asset and facilities acquisitions.
• Work with you and your executive team to continuously maximize enterprise value.

Strategist vs. Scorekeeper

A controller deals with the day-to-day accounting operations. Their function is basically that of a scorekeeper – they tell you what happened after the fact. A vice president of finance or CFO is a strategist, a key member of the executive team with the ability to positively and materially impact the success of the organization.