How Do CFOs Really Spend Their Time? Hint: It Isn't Strategic Planning
Running a successful business involves a lot of planning. Typically, each department is responsible for ensuring that everything from their day-to-day operations to yearly projections is planned out and executed strategically. However, when it comes to your company's chief financial officer (CFO), strategic planning may not be on the top of their priority list. This is due to the number of roles that an effective CFO must fulfill. In fact, according to Gartner's research, the average CFO loses almost eight hours — roughly one business day a week — to the wrong activities.
Most roles that are filled within a company have a set number of expectations that come with the job description. These expectations aren't as defined when taking a look at the job description of a CFO. A CFO is generically considered a senior executive that is responsible for managing the financial actions of a company. Their duties typically include tracing cash flow, financial planning, analyzing the company's strengths and weaknesses, and proposing corrective actions based on the company's finances.
Different kinds of CFOs can fit into three specific categories, depending on their strengths outside of their generic definition. Depending on your company and the services it offers, you may want to find out the strengths of your next potential CFO before hiring them. The three CFO categories that are most often recognized include:
The Deal Maker CFO- This type of CFO spends a majority of their time outside of their office. They enjoy the hunt that comes with acquiring a business, seeking and obtaining investors for the company, or working on closing a debt transaction. This means that they spend a lot of time around commercial bankers, investment bankers, current or future investors, CEOs or CFOs of other companies, and attorneys. Although this type of CFO can mean securing a deal, they often lack interest in monthly reports and cooperating with the accounting team.
The Accounting CFO- This type of CFO is the complete opposite of the deal maker, hiding out inside their office to conduct their duties quickly and strategically. The accounting CFO is an expert in their field and relies heavily on doing everything by the books. Although this type of CFO is great for getting their job duties fulfilled to their maximum potential, they often lack the human component, making them not so pleasant to interact with. If you're looking for accuracy and efficiency, this type of CFO is the way to go.
The Operational CFO- This type of CFO knows the ins and outs of the business as a whole. They are often interested in how the product is made and how the end-user is meant to engage with it. Rather than taking matters solely into their own hands, they ensure they have a strong accounting team to do the leg work. This allows the operational CFO to attend events that give them a better understanding of the business as a whole. The CFO will also take the work done by their accounting team and ensure its accuracy while also making it easy to understand for the whole company.
Ensuring that your CFO matches the requirements needed for your business is extremely important. If you are looking for a people person, consider taking on a deal maker. In contrast, if your company isn't people-oriented, an accounting CFO is a great choice to ensure a timely and accurate reporting of finances every month.
Despite which CFO is the best fit for your company, here are a few ways that all successful CFOs spend their time:
Morning Catch Up
As with any job, emails and other important messages pile up throughout the day and after working hours that one may not be able to attend to immediately. All successful CFOs begin their workday by dedicating their first hour or two to answering emails they may have neglected the day prior or received overnight. Allocating a specific time frame to only focus on catching up from the day prior sets a solid foundation for the day ahead. This ensures that all matters are addressed promptly and can even lead to necessary meetings with other departments depending on the subject of the emails.
Meetings Outside of Their Department
Ensuring that everything inside the accounting department is running smoothly and according to plan is essential. However, meeting with other departments to ensure the same is true within the different departments of the company is also necessary. A successful CFO steps outside of their department to run meetings with other departments so that everyone is on the same financial page. After all, without money to run a company, there would be no company. The CFO is an expert in his field who is responsible for knowing the company's finances and how each department is using its share of the budget. Meeting with the other departments allows the CFO to clearly explain what is and what is not working and the changes that need to be made so that the company stays within its financial allowance.
Provide Weekly and Monthly Reports
Beyond answering emails and meeting with other departments, the CFO is responsible for providing weekly and monthly reports. The weekly reports are showcased at the department meetings as they are shown more frequently with day-to-day information needed by the departments. However, CFOs are senior executives who are primarily responsible for reporting directly to the CEO. A successful CFO is capable of delivering a monthly report that is written in a way that anyone from the bottom to the top of the company can fluently understand. The monthly report is delivered on time, is statistically correct, and can be understood so that challenges can easily be addressed.
Building an Exceptional Team
CFOs are an essential part of the business but they can't do their job alone. Behind every successful CFO is an exceptional accounting team that is responsible for the majority of the leg work. To ensure their success, CFOs must dedicate time to building an exceptional team so that they can handle the work that is thrown at them. The accounting team should be made up of experts in their field so that the work that is completed is correct and requires minimal supervision. With a great accounting team backing the CFO, the CFO is better able to tackle different tasks. For example, the less the CFO is required to analyze data, the more they can get a better understanding of how the company functions as a whole.
Having a CFO is essential to your business operations. Their list of responsibilities is extensive but an exceptional CFO will be able to manage them all effortlessly. From tracing cash flow, financial planning, analyzing the company's strengths and weaknesses, and proposing corrective actions based on the company's finances, a CFO and their accounting team will deliver the necessary results promptly. By connecting with other departments, the CFO can ensure that everyone in the company is on the same financial page so that the business can continue to operate smoothly.
Beyond their team, the CFO can enlist help from companies such as Fyorin which offers a variety of services to ease the amount of responsibilities CFOs are in charge of. Fyorin offers virtual cards, multicurrency accounts, and sub-accounts which can all collectively be used to decrease a CFOs workload by automating a variety of tasks. An exceptional CFO may know how to effectively juggle all of their responsibilities, but with the help of Fyorin they can find more time to focus on more important tasks that can't be automated.