Analytical Focus Moves CFOs From Bookkeepers to Business Partners

Today’s chief financial officers are as different from 1970s bean counters as apples are from oranges.

In an operational landscape marked by ongoing uncertainty and a sea change of macro shifts, modern CFOs have had to adapt to a new world of business realities — and fast.

“It naturally elevates the CFO role when your growth trajectory changes and things go back to the balancing act of capturing a realistic view on growth while hitting plans again,” Provi CFO Kevin Price told PYMNTS for the series Day in the Life of a CFO.

“Part of the tough job of the CFO is capturing the ambition of an organization’s growth wants and needs and putting that into a financial basket that makes sense, one that you can plan against and resource against,” Price explained.

Compared to periods of hypergrowth when CFOs had to just “hang on for dear life,” the CFO role is now “a lot more interesting” and more on the leading edge of the business, he added.

A fundamental truth of doing business is that a business needs to align its strategies based on both external and internal conditions. With growth trajectories changing after the cheap capital and pre-pandemic boom years, CFOs are now more crucial in balancing realistic growth expectations and striving for profitability — two contemporary functions that stand in stark contrast to the last decade’s growth-at-all-costs mentality.

The Importance of an Analytical and Operational Approach for CFOs

One of the most significant transformations in the CFO role, according to Price, is the move toward operational leadership and financial partnership. This shift requires CFOs to gain a deeper understanding of the business, empathize with teams, and work collaboratively across departments.

“Roles are more operational than they used to be,” Price remarked, highlighting the evolution from bookkeeping to integral strategic planning and execution.

This change not only makes the CFO’s job more interesting but also more challenging, requiring a blend of financial acumen and operational insight.

“CFOs need to understand the business, not just model it and visualize it … but work with teams as a partner not just a bookkeeper keeping things on track,” he said. “There is a lot more financial partnership and analytical leadership that the finance department is providing now.”

As the context of financial leadership shifts, so too does the way the rest of the executive leadership team works together.

“When a business gets to a certain scale, cadence, consistent communication, consistent reporting, consistent KPIs are all really important,” Price said. “A lot of that is because things are shifting so quickly… You don’t want to be six months behind.”

Whether it’s through verbal communication, a PowerPoint or an Excel model, “things just need to be clear and consistent, and folks need to understand what they’re looking at quickly,” he added.

CFO as Chief Reality Officer

With a clear, holistic point of view on their organizations, CFOs are now well-positioned to dispense the key currency of the finance function’s role: truth and reality-setting.

“I’m big on optimism, and I don’t want our finance team, or any finance team, to be the naysayer or the police … but you also need to be realistic,” Price said.

He explained that what this looks like in action is either “investing ahead of the curve,” which is a growth mindset, or “investing at or ideally behind the curve… Don’t be placing bets and being more disciplined and realistic around projections and the resources, technology and people they’ll require.”

“I like to consider the finance team as more of an analytical support model,” he said. “So, if you are head of commercial, if you’re head of sales, if you’re head of HR, if you’re head of operations — you should have a partner working alongside you, helping you do analysis and build plans to run with your vision and put validation and rigor behind that… If you want to present a plan, it should have already gone through the hoops with the finance team, and we should be co-presenting. When things are working correctly, we are very embedded in the organization.”

“That’s what I mean by operational versus sitting in our corner and measuring things, saying when they are off,” he added.

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