How do you define the performance and value of a CFO?
An organization’s credibility is enhanced by an effective CFO. They allow those dealing with the company, including lenders, insurance underwriters and suppliers, to feel confident in the business’ strategies and positions, which may result in better pricing and other terms.
The CFO also effectively utilizes the company’s professional advisers, such as the accounting and law firms, to supplement their skills.
Studying and reporting on trends, opportunities and growth initiatives, developing corporate-wide action plans to increase profitability and implementing efficient and effective tax strategies are additional ways a CFO demonstrates value.
The ultimate litmus test for a CEO to assess a CFO’s value is to ask, ‘Is my job easier and is the company better because I have this person in my organization?’ If the answer is no, perhaps the wrong person is in the position.
A high-performing CFO is a key component of building and maintaining a successful business that will overcome challenges and obstacles and take advantage of opportunities. View your CFO as an internal adviser, not as an accountant.
What are the more significant challenges CFOs have to overcome today and in the future?
There is a host of challenges resulting from the current economic climate, and a high-performing CFO is ideally situated to tackle such issues. Efficient working capital management and related bank financing matters are critical to a company’s success. Those overseeing these matters need to be more vigilant, creative and prepared.
Today, almost all companies operate globally in some way. A CFO must develop and maintain a base level of expertise in international issues, including international accounting standards, foreign exchange transactions and transfer pricing strategies.
In many organizations, the CFO either oversees or is actively involved with the IT and HR departments. Today’s CFOs need to know how to leverage technology throughout the organization for the greatest return on investment. In addition, they must be conversant on the impact of employment law and employee benefit initiatives to better understand and quantify the financial consequences of HR actions.
The challenges facing today’s CFOs are significant, but at the same time create opportunities for meaningful contribution and impact. High-performing CFOs are up to the challenge and see the opportunities available.
Stephen W. Christian is the managing director of Kreischer Miller. Reach him at (215) 441-4600 or [email protected].
