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The Growing Role of the CFO

The role of the CFO (for both full-time CFOs as well as part-time CFOs) has consistently grown over the past couple of decades. No longer is the CFO just in charge of accounting and generating financial statements (e.g., sales, COGS, operating expenses, profits, balance sheet, cash flow, etc.)

Overseeing the accounting processes to compile the financial data is just the first step for today’s CFO. The CFO is now a key driver in a company to utilize the financial data in order to generate strategic and operational insights for the rest of the business.

From our vantage point of working with many different companies (ranging in size from startups to small businesses to middle-market companies) here in the San Francisco Bay Area, this trend has been accelerating in recent years in a variety of industries.

A recent post by David Westberry of BridgeStreet Partners reflects the increasing influence of today’s CFOs:

“Highly successful CFOs in today’s environment are expected to play a much broader role,” said Dave Westberry, managing director of BridgeStreet Partners, a boutique search firm founded in 2007. “These individuals are routinely looked upon to serve as a partner to the CEO and advisor to the other members of the senior management team. CFOs also take the lead in helping each business unit leader fully understand the financial ramifications of their decisions on their respective units, as well as the business as a whole.”

Increasingly, CFOs are spending more and more of their time customizing financial data and insights for not only the CEO, but also the Board of Directors, business unit leaders, banks, and shareholders. As a result, CFOs are needed who aren’t just accountants, but also have deep operational and analytical skills and experience. Clearly, traditional accountants with their narrow, functional focus are challenged to fit this ever-broadening role of the CFO.

Further exacerbating the shortage in high quality CFOs is the lack of succession planning in even large companies, let along small businesses. A new survey by Korn Ferry found that only 34 percent of companies surveyed had an actual succession plan in pace for the CFO. Additionally, 81 percent of companies said that there is not an internal, ready-now successor to the current CFO:

“If these survey results are extrapolated to the middle market, which is estimated to be 200,000 companies which comprise approximately $10 trillion of the U.S. economy, the need to develop strong CFOs becomes even more apparent," said Mr. Westberry.

If you are a small business or middle market business owner or CEO within the San Francisco Bay Area or Silicon Valley, in need of an experienced part-time CFO to help your company scale effectively, while improving cash flow and profit margin, our highly skilled outsourced CFO services provide direct access to high-quality expertise in a cost-effective manner.

CFO Growth Advisors (CGA) specializes unique and highly effective growth strategies that are tailored to help companies grow more quickly and efficiently while improving sales & profit growth. Contact us to learn more.

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