Many things go into running a successful finance organization. As the person in charge of the department that has a hand in nearly every part of the organization, your role as a CFO has continued to evolve over the past two decades. While once responsible for simply being the monetary gatekeeper, the office of the CFO has become more diverse, adaptive, and strategic.
The Broadening Role of the CFO
Throughout the past decade, everything about the CFO role has shifted. While still responsible for the compliance and stewardship of the organization, your job title now has you focused on guiding growth, investing in things that fuel this growth, and shaping the overall business strategy.
Something you may have come to know as the four faces of the CFO, your job now requires you to be a steward, operator, catalyst, and strategist, pushing the finance organization into new areas and leading both your department and the leadership team into a new business reality.
Understandably, this requires faster decision-making, proactivity, and a deeper understanding of both what is happening and what might happen. From being able to analyze a variety of scenarios to having a clear, accurate, and up to the minute picture of your business, you can connect vision to action.
How the Right Information Connects Vision to Action
Part of embracing the catalyst and strategist role of the CFO is to embrace a visionary mentality. Visionaries are able to unite the organization around clear goals, unifying inputs and pointing the organization in a direction that is specific, measurable, achievable, relevant, and time-bound (SMART).
In order to achieve this, the modern CFO needs to have a clear picture of what’s happening and be able to communicate this in a way that even the least financially-savvy leader can understand. How? It starts with KPIs, expands into reporting, and offers complete understanding of complex topics.
Key Performance Indicators: Better Ways to Connect and Measure Information
Now more than ever, CFOs are expected to have real-time numbers at their fingertips. But it’s not just numbers—revenue is a number, profits are numbers, and they only scratch the surface of your business. The real value in an organization comes when leaders can combine inputs to bring up valuable insights. These combined metrics, or key performance indicators, help to expose data and facilitate decisions.
But today’s CFO can’t just have access to these KPIs, he or she needs to have these numbers ready, meaningful, and and up to date. As noted in a recent Acumatica blog,
All businesses are looking at financial management software with key performance indicators (KPIs) that tell them at a glance the health of their organization, whether it is forecasting seasonal sales, avoiding inventory shortages, finding the most profitable price points, or any host of other business metrics.
But it’s not enough to know the KPIs for your company. The real challenge is finding the right financial reporting and analytical tools to track and report on those numbers and to do so in a way that is meaningful to the parties who need to know them.
In this, the right solution can bring together numbers from a variety of sources to help you better expose data and drivers behind said data to make reporting simple. But for many organizations, your ability to understand data is only half the battle.
Bringing in New Voices to Instill a Better Understanding across the Organization
With finance seeing new responsibilities ranging from operations to cybersecurity, you’re going to have to consolidate and communicate with an expanding group of executives. Not every salesperson or CEO is going to make sense of a PivotTable in the same way that you can, not every IT person is going to understand why a specific KPI matters to them, and not every CEO has time to analyze the nuance behind a KPI. That’s where you and your finance team need to step in.
As discussed above, part of being a visionary means to unify people under common and understood goals. In turn, it requires you to demonstrate why they need to embrace this vision.
“It’s the job of the Modern CFO and the accounting department to not only create and verify financial reporting and information but to make that validated information relevant and useful to the rest of the organization. The language of accounting can no longer be a foreign language spoken and understood only by accountants. […]
Few people can speak or understand the language of GAAP or generally accepted accounting principles: “Accrual versus Cash”, “Asset versus Expense”, or worse, what makes something a “Debit versus a Credit”. To maintain relevance in today’s organizations, it’s up to accountants and their leaders to shift their primary focus from back-office rule-following to front-office communication.”
With the right information in your hands—all with less work from your team—you can focus less on the laborious measurement process and more on the communication aspect, unifying people under one voice and giving a clear picture of how this works.
Connect, Communicate, and Lead: Modern CFOs Need Modern Solutions
As your role continues to evolve and expand, your ability to leverage the right information often requires you to understand the processes and technologies that can get you there. Cloud ERP has made it easier than ever to connect your data, understand how things work together, and lead not only the finance team, but the other departments you work with.
If you’re looking to understand some of the other challenges you face in connecting your business (and how cloud ERP can help), we invite you to download the free eBook, Top Technology Challenges for the Modern CFO.
If you’re looking to learn even more about how modern ERP can connect your business and help you do more with your day, get to know Kissinger Associates. For decades, we’ve helped growing companies in manufacturing and distribution to leverage solutions built for them. Get to know more about our team and contact us for a free consultation.