The chief financial officer has a much bigger role than you think. The chief financial officer is the person who makes all the decisions related to the financing of a company and is responsible for devising a strategy to keep the business growing. This position is characterized by having a broad vision of everything that happens in the company since it is responsible for both management, control and financial analysis. That is why in some cases, especially in medium and small companies, this position coincides with that of General Director.
In addition, this position requires a good control of the cash flow of the business thanks to a correctly drawn strategy. The chief financial officer will be responsible for making budgetary decisions, reducing costs, and increasing profits. Now do you understand why we say that it has such an important role in a business? We could almost say that the future of the company is in your hands.
So much responsibility and pressure does not make everyone fit for CFO of a company. Still, for all those people who want to access this position or who already are, and out of curiosity want to know if you meet the requirements, we bring you 10 characteristics that every CFO should offer.
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What characteristics does a CFO have to fulfill?
- They devour information and are in a continuous learning process
CFOs constantly recycle their knowledge in order to adapt to the different changes that consumer behavior, current regulations or technology may experience. The chief financial officer should know the theory and practice of the money and capital markets.
- Understand the business model
As we have seen previously, some of the CFO’s tasks, such as optimising cash flows or reducing costs, imply the need to deeply understand the business model of each company in order to make the right decisions. That is why it is common to meet CFOs who have gone through various positions within the same organisation.
- Wide knowledge in financial accounting
As we mentioned at the beginning of this post, a person who aspires to be a financial director will have to have a lot of accounting knowledge. Only in this way can you establish the indicators and control the performance of the company. This position requires the ability of numerical analysis, use of spreadsheets and business plans, among others.
Change is the only constant in this life and the CFO has to always keep it in mind. Knowing how the company can adapt to change and knowing how to implement the necessary measures to adapt to it is one of the most important characteristics that a CFO must have. Only then can a problem be transformed into an opportunity.
- Be a leader and have long-term vision
Leadership is one of the most in-demand skills of a CFO; after all, it is still a management position. They will have to lead a financial team to which he will have to provide motivation day by day so that he can succeed, apart from his knowledge.
In this position we will have to create goals and objectives to meet monthly. Flexible hours and more freedom of decision are two ways to create an enabling work environment for the team to be much more motivated.
- Be a discreet person and with ethical values
A large amount of sensitive information passes through the hands of a chief financial officer that in many cases, surely will not have to leave the company in which he carries out his work. The person in charge must earn the trust of his colleagues, his bosses and other interested parties. In other words, you will have to be a person committed to everything you do and with strong ethical values.
- Know the local and global financial regulation
A good CFO will always have to keep in mind the interests of the company itself. In this sense it is important that you know all the regulations of both local and global control agencies and avoid an error to the company that could cost you a fine.
- Be a good negotiator
One of the most important daily tasks of a CFO is to negotiate the best sources of financing for the company, a vitally important responsibility for the business. In this position, you will always have to look for the best option that benefits the company as much as possible.
- Skills to manage risk
Being able to confidently recognise, quantify and manage risk will assist in management decision making. This is an extremely important point at times like when the company begins to expand or we find new emerging markets where there is an opportunity for growth, but also risk. Coping with calculated risks is a basic characteristic for large CFOs.
- Learn that perfection cannot be reached
Throughout the post we have dedicated ourselves to listing all the good characteristics that a CFO should have. This is not to say that you are never wrong in any of the aforementioned things. All human beings are imperfect and it is normal to make mistakes. It is not good to put too much pressure on oneself.
The CFO also needs to learn that he has strengths or weaknesses. Sometimes it is a good option to know yourself and hire an additional person to complement those weaknesses that the CFO may have. Only in this way will we achieve all the objectives that we have set for ourselves.
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