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What Does It Take to Become a Modern CFO?

What Does It Take to Become a Modern CFO?

What does it take to become a modern CFO? Must you, like Gilbert and Sullivan’s “Modern Major General,” be “very good at integral and differential calculus, knowing the scientific names of beings animalculous…?” Luckily, it’s not quite that grave an emergency. Change if afoot, however. We cover it on our white paper, The Definitive Guide to Modern Accounting. This article explores how modern accounting makes the modern CFO.

What is a Modern CFO?

A modern CFO is expected to do more than just manage a company’s accounting and finances. The job has become broader, with greater involvement in strategic decision making and executive leadership. There are several reasons for these changes. For one thing, financial agility has to align with business agility. Money is the secret ingredient in realizing agile strategies. There is no agility without capital. Thus, the CFO is now included in conversations about business strategy much earlier than would have been customary in the past.

The modern CFO is also an increasingly digital executive. In a small organization, he or she may effectively become the Chief Digital Officer. The CFO’s department is now typically an integrated element of a wider corporate information ecosystem. For the company to work effectively, it must have a modern CFO who understands the relationships between the respective information systems of each department: HR, operations, logistics, customer service, field service, procurement and so on.

Perhaps most importantly, the modern CFO is a master of corporate financial data. He or she is tasked with creating timely, insightful reports that will drive productive executive leadership dialogues. Such reports go far beyond the basic financial statements, receivables estimates and the like. Modern CFOs are expected to merge data streams from operations, external market research and more. Their reporting may influence production planning, marketing campaigns or even mergers and acquisitions.

How Software Enables the Transformation of the CFO’s Role

The modern CFO’s digital role makes software essential to the job. In particular, cloud-based software is what facilitates the many varied duties of the modern CFO. Cloud-based ERP makes possible the kind of rich, real time data reporting and analytics the job now entails. It is cloud-based software, like ERP and accounting packages, that also gives the modern CFO the ability to integrate financial systems with operational systems. Examples of cloud-based accounting software integrating with other business systems include:

  • Electronic Data Interchange (EDI)
  • E-commerce
  • Point of Sale (POS)
  • Customer Relationship Management (CRM
  • Time, expense and travel management
  • Manufacturing
  • Budgeting and planning
  • Inventory management
  • Project management/Project accounting
  • HR/Payroll
  • Contract management
  • Document management
  • Payments and billing

Of course, it is possible to integrate these different applications into a legacy accounting system. It would just be an expensive and slow proposition—and hard to change. In contrast, cloud Application Programming Interfaces (APIs) make it relatively easy, inexpensive and fast to connect these many different systemic modules of a business into a core accounting system.

We have worked with many companies on the implementation of cloud-based accounting software, the related work of data analytics setup and the integration of other business systems. In this way, we empower the modern CFO to be a valued member of the executive team. To learn more, download the white paper.

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