In many companies, people are concerned about the pecking order. Who has the most power, the most pay, the most responsibility? Over the years, I’ve become less concerned about those ratings.
My interest is always in who has the most information. Because the old cliché is true – Information is Power. But for the context of this article, information is the source of decision-making. It is information that brings people together, that draws people to that office down the hall. Who is it that possesses the information that drives the company forward? Who is the person that has the power to drive the final decision, or at the very least, provide the information that is critical to the decision process?
The person in the “information seat” is the CFO. In most middle market companies, the CFO is responsible for these functions:
The information from those areas is under the direct responsibility of the CFO. But there’s another piece to it. The CFO is responsible for the ultimate bottom line of the company, and therefore everything that flows into it. Since every activity in the company shows up in the bottom line, the CFO has the responsibility or authority to stick their nose into every operation of the company. And a good CFO will do just that. And, with the addition of technology, the impact of the CFO is even greater.
With digital automation and other technologies, business has been transformed, and the role of the CFO has changed for the better. Now, there are more tools to assist with all of the analysis that provides the competitive advantage to leading edge businesses. No longer is the finance team just concerned about invoicing and collections, they are involved in budgeting and forecasting, modeling and analysis of all kinds. With the latest technology at their fingertips, they can be even more productive than they’ve been in the past.
There has been a flurry of activity around compensation packages. With access to more data, and the creation of more complex, flexible and accurate models, these decisions are more data driven than they are guesswork. A CFO brings understanding of the financial impact of the possibilities.
A CFO’s role has changed from providing month-end numbers for the CEO so that he can see how much money the company has made, to one of providing metrics to every critical department in the company so that the department heads can see the financial impact that their decisions have on the company’s results.
In actuality, the role of the CFO has shifted dramatically. No longer is the CFO just the person in charge of the accounting system. Deloitte has defined the four faces of the modern CFO, with the last two becoming the critical roles that can drive a company forward:
As technology has become more important in positioning every business – large or small – the person responsible for collecting that data, using the technology, and disseminating the analysis in a manner that is usable by everyone is increasingly the CFO. They may be sitting quietly in the corner, but don’t be misled. Information is power, and the CFO is the one that has the information within their grasp.
Harvard Business Review –
It’s being called the Great Resignation, while simultaneously the unemployed are getting jobs at a slower rate than they were
Our people are unique CFOs. They are all operationally
based financial executives.
Created Custom For Your Company By an Experienced CFO