If the financier simply performs tasks from the head, then the financial director is responsible for all the finances of the company. He analyzes the state of the business, identifies problem areas, suggests ways to improve efficiency, and makes forecasts. He helps the company not to lose money in a crisis. If you are having financial difficulties and you do not know where to turn, you can switch to Payday Depot and your problems will be solved. So, what difficulties can a young Chief Financial Officer (CFO) face – and how to prepare for them?
Determine your development path
It is important for a CFO to have experience in two main blocks of finance. He must understand how it works:
back office, accounting – financial operations, accounting, and reporting (there are more algorithms);
management finance – modeling and evaluation of initiatives, decision support (there are more judgments and expertise).
If you develop only within the framework of accounting (with clear regulations), there will be no growth in the position of financial director. If you deal only with financial management, you will not have enough understanding of internal procedures. In general, the chain of development of the financial director looks like this:
specialist (financier) → managerial specialist (you are already responsible for people) → head of the finance department → financial director.
Understand the tasks of a financial director
The financial director performs several roles at once:
When a specialist is at the bottom of the hierarchy, they are expected to achieve results at a basic level and have the ability to build cooperation. Developing within the function, he begins to be responsible for other specialists – and he already needs management skills: the ability to form teams, motivate, involve.
The next step is to become a senior leader and be responsible for managers who, in turn, are also responsible for others. It requires strategic flexibility and vision, breadth of mind, innovative thinking, and the ability to work with uncertainty and solve complex issues. The CFO’s most important job is to support a core business goal: profitable growth on a long-term basis. The main “added value” on the part of the financial team and the financial director as the leader of the function is the analysis of management reporting, recommendations, evaluation of business initiatives, financial modeling, forecasting, and scenario calculation.
Build the Right Skills – Functional and Leadership
Functional competencies appear in the process of learning and acquiring professional experience. It is more difficult with leadership competencies – their formation depends on personality, actions, and reactions. They are developed in the process of self-development and are largely associated with emotional intelligence.
Work with the team on a new level
Once you’ve become a CFO, it’s tempting to continue to run as a “specialist” or “manager” by inertia: don’t delegate, delve into small details, and be involved in all decisions. This can lead to inefficiency.
Another potential challenge is interacting with heads of other functions. For example, salespeople see the goal in sales, and the CFO is worried about profitability – selling “at any cost” does not suit him. Or the supply department increases inventory for sales, “freezing” money in working capital. Here you can encounter “bunker thinking” when functional interests and KPIs dominate over general business interests.