5 Habits of Top CFOs

8 min read

Chief financial officers are sometimes thought of as behind-the-scenes, numbers people who can close themselves in an office with a stack of financial data and emerge with their jobs successfully completed. This picture, however, is dreadfully outdated, and the role of a modern CFO has been transformed. While CFOs are still financial experts, they must also be strategic visionaries who are directly involved in all aspects of business operations.

To bring your understanding of your role as CFO from pencil pusher to forward thinker, adopt the following five habits of highly successful (modern) CFOs.

5 Business Leadership Habits of the Successful CFO

1. Leave Compliance to the Controller and Focus on the Future

Of course, compliance is important. It's necessary for operating legally, not incurring any avoidable tax penalties, and being able to keep your business operating. However, compliance should not be the CFO's top priority, and the most successful CFOs leave regulatory compliance to the accounting professionals who handle it best, controllers.

The most successful CFOs understand their true role in the business, and that's focusing on forward-thinking financial strategy. A CFO's primary duty should involve developing and implementing financial management strategies that are designed to optimize operations, maximize profits, and help the business achieve its short and long-term goals.

Additionally, the CFO should keep a close watch on the industry and developing technologies in addition to shifting economic and political landscapes that could impact the business's operations. By watching what is happening in the "now," CFOs can better anticipate what's going to happen in the future. By anticipating industry and economic changes, CFOs can better prepare their companies to leverage emerging opportunities and weather developing storms.

2. Establish Sound Values and Follow Them

Every successful CFO has a sound moral compass and chooses to follow it. Establishing the highest ethical standards in your business's back office is essential to building and maintaining trust and a good professional reputation. As a C-suite leader, the CFO's ethical code establishes the ethics of the company. It's up to you to direct your controller and establish sound policies and procedures that are designed to protect the integrity of your business, its people, and the back office.

As CFO, it's essential to stick to a respectable code of ethics not just when it comes to compliance and following the law but also when it comes to how you present your company's financial health and projections to the CEO, your board of directors, potential investors, employees, and the rest of the world.

Read More: How Much Do Bookkeeping Services for Small Businesses Cost?

Although one might feel tempted to fudge results or manipulate a chart to present the company's numbers in a more attractive light, as CFO, you must be honest and transparent regarding your numbers. Honesty and clarity are the only ways to create and maintain the highest ethical standards.

3. Get out of the Back Office

Sure, CFO stands for chief financial officer, and that means CFOs are in charge of finances. However, finances affect and are affected by every aspect of a business. So, in order to be a successful CFO, you must expand your horizons beyond the back office. Spend time talking with the other members of the C-suite in addition to department heads. Attend sales and marketing meetings. Weigh in on research and development. Get to know your customers and listen to feedback from your customer-facing representatives.

Only when you have "boots on the ground" (so to speak) in every part of your business can you become a truly great CFO. Only when you're involved in your business, can you be a CFO who understands exactly how your company makes the revenue and profits you analyze every day, exactly what expenses are necessary and justified, and exactly how every financial decision you make will impact operations and your business's most valuable asset (its people).

How much do outsourced accounting services  cost compared to an in-house team? 👇

In reality, in-house bookkeeping & accounting employees could be costing you more while delivering less. 

Building your business’s accounting team can be both costly and challenging. Like any major decision, it starts with weighing your options.

4. Build Relationships and Cultivate a Team You Trust

As a CFO, you're a numbers person, but that doesn't mean you should lock yourself in the back office and forgo being a people person, too. Relationships are just as big of a part of the CFO role as they are a part of the CEO and COO roles.

First, a successful CFO must recruit a team they can trust. This means intentionally surrounding yourself with competent people who share your values and those of the company. Once you have your team, align them around common goals by becoming their champion and the kind of leader that listens, provides clear direction, and communicates freely. Provide your people with the tools and training they need to do their jobs well.

In addition to cultivating an exceptional team, ensure you also maintain strong relationships with your fellow members of the C-suite. Meeting frequently, understanding each other, and having clear lines of communication will help to ensure that your entire organization is on the same page and moving in the same direction toward a unified future vision.

Developing and maintaining close relationships throughout your company will ensure you're able to accomplish your goals by having people on your side who are willing to help you do the necessary work. It also provides you with valuable departmental insights at all levels of operations that can help you improve your financial strategy.

Read More: Financial Reports vs. Management Reports: What’s the Difference?

CFOs should also work on fostering relationships outside of the company. External networking is essential for your company's success. These types of relationships can help you find and recruit top talent, select individuals to serve on the board of directors, drum up investors or donors for your next round of fundraising, or plant the seeds of a lucrative partnership. Outside relationships can also be useful in other important ways such as selecting a bank or lender to work with, finding the best insurance provider, or scouting out your next office space.

5. Look for Growth Opportunities (Not Just Risks)

Yes, being a great CFO requires financial discipline and back-office smarts, but the job is not just about mitigating financial risks. To be a superior CFO, you must also keep an eye out for opportunities for your business and ensure that you're doing what you need to do now, on a daily basis, to ensure the business is prepared to take advantage of opportunities as they arise.

Successful CFOs understand what opportunity looks like and how that can change depending on where the business is in its current growth cycle. For example, at the moment opportunities for your company could include identifying and fueling sales and profit drivers, researching and developing new products or services, or pursuing a merger or acquisition.

As CFO, you should work closely with your company's CEO to ensure that your financial strategy supports your business strategy and vice versa. Make sure that your strategies harmonize so that your whole company can be aligned and working to achieve the same goals.

Does a Chief Financial Officer Really Need Outsourced Accounting Services?

Do you have the financial knowledge and experience to do every back-office job? Of course, you do. Do you have the time to do every back-office job? Probably not. Is handling day-to-day back-office tasks really the highest value way for a CFO to spend their time? Definitely not.

In small and medium-sized businesses, unfortunately, there often isn't enough room in the budget to hire a complete team to handle the necessary, yet mundane, back-office tasks that should be handled by a team of bookkeepers, CPAs, and controllers who are overseen by the company's CFO. As a result, the chief financial officer often ends up wearing many different hats, and the CFO's most important responsibilities (i.e. financial strategy, future vision work, and relationship development) fall by the wayside.

Thankfully, there is a simple solution: outsourced accounting services. Teamed up with a reputable outsourced accounting provider, a CFO can relax knowing that the books are being properly handled, the right records are being kept, and that all of the necessary and helpful financial reports are being generated accurately and on time. With an outsourced team to manage bookkeeping, accounting, and controller responsibilities in your business, you can free up your time to focus on the aspects of your role as CFO that are going to help you become one of the most successful.