The business landscape keeps on evolving, and it won’t stop changing anytime soon. In response to economic uncertainty, changes in regulations, and the slew of new tech entering the scene, many roles have had to adapt and change. One key position that has seen major changes is the title of Chief Financial Officer (CFO), which now involves new levels of strategic planning and decision-making.
If you run a business or want to play a key role in a company, you need to know about the shifts in what’s expected of a CFO in the 2020s. Let’s take a look at the ways this role has evolved and what it means to be a CFO now. We’ll also explore how having the right CFO in place at your company can be the difference-making factor that gives your company a competitive edge.
What Does a CFO Do?
You might think of a CFO as the person who manages a company’s balance sheet, but there’s much more to the title than that. In a modern business, a CFO is expected to be a visionary who can help a company interpret its financial performance, avoid risks, and set the course for major growth. The day-to-day work of a CFO can involve everything from risk management, enhancing efficiency, and managing investments to dealing with cash flow management and tax compliance. To excel in this role a person needs to be flexible, forward-thinking, and solution-minded.
In addition, a modern CFO needs to be exceptionally proficient in using automated tools to interpret data and plan for the future. This often means taking advantage of AI programs that can save hours (and sometimes days) of manual number-crunching. A CFO who knows how to use AI automation to their advantage will be miles ahead of someone trying to fill the role using pre-2020s tactics.
Full-Time or Fractional CFO Staffing?
As more and more companies choose a lean business model, we’ve seen a major rise in the use of fractional CFO staffing services to replace a full-time chief financial officer. A fractional CFO can be a flexible and affordable alternative to a salaried member of a company’s staff, and they can also offer decades of expertise from work with other similar businesses. The fractional approach can be especially helpful for small and mid-sized businesses that might not have the budget to add another employee to the roster.
A fractional CFO still gives a company plenty of time, energy, and resources, even though they won’t spend 40 or more hours per week handling an account. Fractional CFOs make the most of their time by taking on specific challenges that are beyond an in-house finance team’s area of expertise. This might mean getting a company ready for its IPO, handling a merger, or dealing with issues in cash flow management.
The fractional CFO model might be right for your company if you’re having trouble scaling and can’t find the source of a bottleneck. An outside expert can step in, evaluate your company’s finances with objectivity, and help you chart a path forward without the need for a full-time, salaried employee.
How Companies Are Rethinking CFO Recruitment
If you’re looking to take your career in corporate finance to the next level, you might be interested in becoming a full-time or fractional CFO. If so, keep in mind that the recruiting process has undergone some major shifts in the last few years. For example, many companies are actively looking for CFOs who have cross-industry experience and know how to be flexible. This is one of the most appealing aspects of working with an outsourced CFO for many companies; outsourcing brings someone to the table who knows how to handle many different circumstances and sectors.
In addition, as we mentioned earlier, digital finance skills are becoming more important to the role of CFO than ever. If you aren’t equipped to ride the wave of the AI revolution, you might not be ready to step into the role of CFO in the 2020s. Having a deep understanding of blockchain-based financial operations is a must as well, as is familiarity with changes to regulations in different industries. With this specialized knowledge, you can make yourself extremely valuable to companies looking for a CFO, either a fractional or full-time one.
Finding the Right CFO for Your Business
If you’re a business owner looking for a modern CFO, the most important thing to consider is the specific issues your company currently faces. For example, if you need major help handling specialized aspects of your finances from someone who can support your existing finance team, an outsourced CFO might be perfect for your company. No matter what, though, you need a CFO who is technically literate, ready to think outside the box, and highly adaptable.
Also Read: Role of Finance in Business Decision-Making
