Bringing diverse financial expertise, strategic thinking, leadership abilities, and effective communication skills are some of the key aspects that make a CFO great. These are key to driving the financial success of an organization. But there is more to it. Since Chief Financial Officers are critical for growth, it is important to make sure they have the required skills to accelerate growth.
To make the task of the founders and human resource professionals easy when hiring a CFO, we decided to share skills that will improve the chances of making the right hiring call.
Let’s get started!
10 CFO Skills Worth Confirming
Hiring top management professionals from outside the organization is always challenging. Here are skills that will help you make the right CFO hiring call in 2024:
– Ethical Leadership
Ethical leadership is crucial for CFOs to ensure integrity, transparency, and accountability in all financial matters. CFO candidates must adhere to ethical principles and professional standards, comply with laws and regulations, and act in the best interests of stakeholders.
Ethical leadership promotes a culture of ethics and integrity within the organization, builds trust, and safeguards the company’s reputation and value.
– Communication
Communication is key in all businesses. As a senior leader, a CFO needs strong communication skills to simplify financial information and insights for important stakeholders, including investors, board members, and employees. They have to be able to communicate complex financial concepts in a way that is understandable by all.
The trait of strong communication in chief financial officers helps foster trust, transparency, and collaboration within the organization and with external partners.
– Performance Management
CFOs supervise performance management processes to track and evaluate the company’s financial performance against KPIs and benchmarks. Performance management enables CFOs to measure the effectiveness of strategic initiatives and make data-driven decisions to optimize performance.
In short, the CFO’s performance management skills help establish performance targets, monitor progress, and identify areas for improvement. During the interview, analyzing how the candidate has helped manage performance earlier can be key in making the right decision!
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– Strategic Decision Making
The chief financial officer plays a key role in strategic decision-making processes. CFOs provide financial insights and analysis to support investment decisions, pricing strategies, and resource allocations. They evaluate alternative courses of action and recommend strategies that align with the business goals and objectives.
In short, CFOs must have strategic decision-making skills that require analytical abilities, business acumen, and strategic foresight.
– Investor Relations
Managing relationships with investors, analysts, and other stakeholders is crucial to smoothly run core business functions. CFOs communicate the company’s financial performance, growth prospects, and strategic initiatives to investors through earning calls, investor presentations, and meetings.
Chief financial officers also address investor inquiries, provide financial guidelines, and build trust with stakeholders. So, a candidate that can’t maintain healthy investor relations can be a liability in the long run.
– Data Analysis
Interpreting financial data, identifying patterns, and extracting meaningful insights are crucial skills of CFOs. They should be able to use data analytics tools and techniques to analyze financial performance, assess business risks, and evaluate the impact of strategic initiatives.
Data analysis skills enable CFOs to make data-driven decisions and optimize financial outcomes. It is another CFO skill that needs to be confirmed in the initial stages itself.
– Negotiation Skills
Negotiation skills are crucial for CFOs to achieve favorable financial transaction and business agreement outcomes. CFOs need to negotiate with lenders, investors, suppliers, customers, and other stakeholders to mitigate risks and secure agreeable terms.
Strong negotiation skills enable CFOs to protect the company’s interests, maximize value, and build mutually beneficial relationships.
– Audit and Internal Controls
CFOs establish and maintain internal control systems to safeguard the company’s assets and ensure the accuracy of financial planning. They oversee internal audits to assess the effectiveness of controls and identify areas for improvement.
CFOs also manage external audits with independent auditors to assure stakeholders. In short, it is a critical skill for new-age CFOs.
– Tax Planning and Compliance
CFOs develop tax strategies to minimize the company’s tax liabilities while ensuring compliance with applicable tax laws and regulations. They collaborate with tax advisors and legal counsel to identify tax-saving opportunities, manage tax risks, and fulfill tax reporting requirements.
Tax planning and compliance are essential for optimizing the company’s financial performance and managing its reputation. So, during the hiring process, it is important to analyze and understand the CFOs capabilities and expertise in this aspect!
– Cost Management
Cost management is one of the key functions for CFOs to control and reduce expenses while maintaining operational efficiency. CFOs analyze cost structures, identify cost-saving opportunities, and implement cost-control measures across the organization.
Effective cost management contributes to improving profitability and maximizing shareholder value as well.
CFO Skills Worth Confirming
Bringing a CFO onboard can be challenging. What is important for the founders and hiring managers is to know exactly what it is that you are looking for. Always make sure the CFO is ready to navigate complex financial challenges, drive strategic initiatives, and create long-term value for the organization.
In 2024, the trend of outsourced CFO and controller services is picking up as well. In case you are planning to outsource the CFO function, Finsmart Accounting has been assisting enterprises with this for almost two decades now. Learn about financial controller services or send your questions to sales@finsmartaccounting.com for quick assistance.
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India Business Head
Mrs. Dipali Phadke is a qualified Chartered Accountant with more than 20+ years of experience in the field of Accounting, Taxation and Payroll. She is the backbone of Company’s Operations and heads India Business at Finsmart Accounting
