Why CFOs must be able to predict their companies’ future and how they can do it
Proformative.com, a premier website for accounting and finance professionals recently announced their annual CFO Dimension conference to be held this year in New York City on the 19th and 20th of October, 2015. This year’s conference theme is “The CFO as Chief Future OfficerTM – Driving strategy, Leadership and Innovation”. This year, 300 senior level finance, accounting and treasury professionals are expected to attend.
As we’ve seen in several of the blog entries on this site, the CFO’s position and responsibilities have evolved in recent years and the perceived association of their role with just the accounting and finance functions is simply not true anymore.
In the blog entry titled “CFO’s Big Picture”, I discuss how the CFO role evolved from a “chief accountant” to a more strategic role, relying on high quality, timely and accurate data to be able to help navigate the company.
“The CFO’s Revised Job Description” post suggests that CFOs must now oversee areas such as IT, Legal and Operations, in addition to Finance, Accounting, Reporting and Compliance.
And finally, “Why CFOs need to adopt Financial Analytics” discusses the important practice and discipline of engaging in routine analysis of operations and financial data, both actual and forecast-ed, where CFOs are expected to understand operational and financial results and the underlying reasons for any unexpected results or deviations from budgets or forecasts.
As many of us can clearly see and actually experience in our daily jobs, the CFO position, even in smaller companies, is not the same it was only a few years ago. This is partly due to the realignment of the company’s upper management’s duties and responsibilities, but can also be attributed to a range of technology products aimed at solving the problems and challenges that most organizations face on a daily basis, mostly in long term strategic planning as well as financial and operational planning.
We’ve also seen on this blog that for small and medium size businesses (SMB) I highly recommend a suite of software products published by Centage Corporation: Budget Maestro, Analytics Maestro and Link Maestro. I have been a long-time user of these products and went through the various version changes and upgrades over the years, and always felt comfortable that this product line had two simple and well-focused purposes:
- To empower company management with the ability to see, understand and make informed and timely decisions that will affect future performance of their organizations.
- To enable the planning, budgeting and analysis activities by offering a software solution that through built-in business rules and a user formula-free process can automatically generate a complete and accurate budget.
To do that, the software is able to both present future expected results via a set of future period financial statements and other reports, while monitoring past performance, through direct access to actual accounting data, formatted and ready to display in any desired manner.
The ability to access actual data as soon as accounting periods are closed and immediately compare with “future” versions of this data (i.e., budget data) has a profound impact on how the CFO and other members of the management team can move to make decisions with a level of confidence never before possible.
CFOs and CEOs can finally run their organizations based on more facts and less intuition or guesswork. Major mistakes can be avoided or at the least minimized and risks mitigated.