The Changing Role of The CFO In the Underserved Small Business Community

Denver, CO, March 10, 2018: Small business owners are striving to compete in a rapidly evolving, competitive landscape. They’re seeing the new trends in Big Data and the leverage gained when they can unleash the power of their financials to make better, more timely decisions. Large companies are now expecting the CFO to take a more dynamic role in the organization, leading their finance department and providing operational leadership to help their companies run more effectively. So how does the small business community learn from their larger counterparts and take advantage? There are several key changes to the role of the CFO that business owners should be aware of.

How has the finance discipline changed over the years?

The CFO role is a vital missing element in many small businesses, and its role is more important than ever. The knowledge and experience that a professional CFO brings to the owner and CEO have expanded beyond accounting and financial reporting. Today, many companies are choosing to combine the CFO and COO roles, so executives are becoming more familiar with operations of the business. They’re evolving, learning what key metrics are necessary to measure operational performance and how those metrics can be evaluated to improve results, now and in the future.

The Evolution: The CFO’s role has transformed in recent years.

Small business owners typically run their business using QuickBooks, usually relying on a bookkeeper or maybe a Controller to record their business transactions and provide financial reporting. They rely on their CPAs for tax advice and might stretch the relationship to answering questions on more complex accounting matters, but what about understanding the numbers and using that information to run the day-to-day. What they need is a CFO who can provide operational insight into the data that is captured, building data collection systems and key metrics that measure operational performance. This is the evolution – CFOs today are more curious by nature, and they roll their sleeves up and talk to people in all areas of the business. They’re asking new questions, like “how can I help you make your business better?” and “what can I do to give you more insight into your department so you can make more effective decisions?” Good business owners will look for CFOs who embrace the new change in their role, who are curious about the business and how to run things more efficiently.

With the explosion of the Cloud and the ease of deploying SaaS application systems, the small business community can now leverage technology to level the playing field. They’ are able to compete with larger competition and they are expected to win. They’re thought of as equals with their larger counterparts and expected to bring to their company a level of sophistication that was never thought of before. This new dimension creates new layers of operational complexity and business requirements, and for the first time, the ability to capture real-time data automatically that was manually collected in the past. It necessitated a shift in the CFO’s role, and CEO’s are looking for CFOs who want to look beyond just the accounting data and financial reporting. They want strategic thinkers and business partners who leverage best practices and a system of controls that create more value for the company.

New Requirements: The CFO is required to do more in today’s fast-paced market.

I like to tell people that in order to be a CFO in this new landscape, you have to channel your energy into driving business performance. You have to be forward-thinking, using your penchant for analysis and financial reporting to beyond the numbers. CFO’s today need to do a walkabout, talking to people at all levels within their organization and asking them how they can help them do their jobs better.

I’ve always said that “what gets measured, gets done,” and it’s all about finding the right things, at the right points in a process, that measure both good and bad results. When CFO’s help their managers identify metrics that matter and align these metrics with the tools and systems that collect that data for measurement, they become a valuable, strategic partner at all levels within the business

In the past, CFO’s may have not collected data on the number of calls it takes to successfully reach a prospect, or the relationship between shop-floor temperatures and daily production levels (or reductions in scrap). It’s focusing on the one thing that makes a difference and identifying the key points along a process that optimize performance, drive improvements, increase revenue, reduce expense, speed up production, and more. Each business is different, and CFO’s who are creative and naturally curious will do well in this new environment.

If anything, these dialogues help bridge the gap between finance, operations and IT, which are oftentimes startingly separated in spirit and in fact. Opening communication and helping the business recognize that processes cross lines of business, regardless of the organizational structure, improves people’s understanding of the upstream and downstream implications of business decisions, process changes, and more. The CFO acts like a conductor, orchestrating small improvements at first that translates into real results over time.

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