CFOs can sometimes go unnoticed when discussing how to build a successful business, but having an effective CFO can drive your business either into the ground or into high sales. CFO stands for “Chief Financial Officer”. They are responsible for all financial matters within a company, this includes deciding on how much of the company’s money should be put into investments, overseeing the structure of the capital, and signing off on reports from the accounting department. CFOs should be incredibly good with numbers and have a strong aptitude for analysis, risk assessment, and communication.
Here is my list of the top 5 skills CFOs must have in order to make a positive impact on their company’s finances.
- A high aptitude for analysis
Every CFO must have a good understanding of analytics. They should be able to look at a data report and make good financial decisions based on what they see on the charts. If you are hiring a new CFO, be sure to find someone who has experience using analytics software and has the type of mind that can understand and process data easily.
- Able to adapt easily to new technologies
The world is moving super fast, and the ones who can’t get on the wagon will be left behind. There are many different types of new technologies and software programs coming out that are geared toward the finance industry. We didn’t always have the calculator, but when it came out, it cut an accountant’s workday in half. A good CFO should not be afraid of these new advancements but accept them and adapt to them quickly.
- Strong leadership skills
One of the main skills CFOs should have is the ability to lead. A CFO is responsible for making the final decision, so…if they are not confident in making a decision or answering a question about finances, then they are not ready to be a CFO. A CFO will feel comfortable and confident at the top of the ladder, not challenged and unsure.
- Passion for the company
Passion is an incredibly important trait in any employee. If the CFO does not have passion for the company that he or she is working for, then there is a lower chance of them doing a good job.
- Experience with risk assessment
A CFO should always be looking ahead and thinking “how might this event affect the finances of this business?”. You do not want to hire a CFO who makes decisions based on intuition or feeling (though there is always room for a little bit of that). You want someone who can make the calculations, determine the obstacles that might negatively affect your company’s bank account, and lead the financial team around those obstacles to a prosperous future.
These are the top 5 skills every CFOs should possess. So…next time you are in the market for a new CFO, read through the list and make sure that they check all of the boxes. If you are looking to see what an effective CFO looks like, make sure to listen to my Podcast with Encore Enterprises CFO Yatin Ghandi.