Top Priorities for CFOs

Still treating your Chief Financial Officer more like Chief Bean Counter? You’re making a huge mistake. Today’s CFOs have the ability – and the responsibility – to play a far more strategic role in identifying profit growth opportunities for the organization. There are a number of ways savvy CFOs can drive value in the business. Here are just a few ways your CFO should be stepping up to the plate for the benefit of your bottom line:

  1. Focus on Cash Flow – All too often, CFOs focus solely on income and earnings per share. As a result, they tend to distribute capitals in ways that emphasize earnings per share. While these are certainly key metrics, much can be gained by shifting that focus to fresh cash flow generation and reallocation. It falls to the CFO, therefore, to ensure that financial statements emphasize cash earnings, investments, and resources available to creditors or available for returning to shareholders or reinvesting for future growth.
  2. Adopt a Strategic View – CFOs must take a strategic view to the role cash plays in their organization. Each company and industry uses cash differently, so it’s crucial that the CFO becomes deeply involved in the strategic discussions of the management team. They should draw upon a strategic finance support team that will be included in each and every strategic session. All operational units should also be included in such discussions and the CFO will be called upon to provide a framework to guide these conversations.
  3. Build a Strong Bench – While it may be difficult to imagine someone else assuming their responsibilities, succession planning is an important endeavor and one which the CFO must attempt to do. It is incumbent upon the CFO to identify a replacement for himself as well as for every key financial position to ensure smooth executive transitions. They must also ensure that a sufficient training process is in place to prepare those high-potential finance professionals to take the reins.
  4. Communicate Clearly – It doesn’t do much good for a CFO to have a firm grasp of the company’s financial business model if the rest of senior management is left in the dark. An effective CFO needs to communicate regularly to fellow officers and to the company’s board of directors. Each one of these key individuals must have a firm grasp of how the company creates value, where the company’s sources of value lay, and how these value sources are being nourished.

To engage in further discussions about the chief priorities of the Chief Financial Officer or any aspects of the financial services industry, contact Daley and Associates. We offer superior recruiting and placement results, specializing in auditing and financial placement.

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