3 Fallacies about a CFO

If you are a business owner you likely have either a full or part-time CFO or Controller. Fallacies can prevent you from getting the most from this person? Having filled these roles as both a full-timer and a part-timer, I can tell you from experience that there is a high likelihood that you don’t need someone full time to fulfill either of these roles. See Spend Wisely – Go Part-Time for more on this. Regardless of whether this person is full or part-time, my observation is that many owners don’t clearly understand what they should expect of this individual. So, let’s look at some fallacies.

One, They are Pure Overhead

Though I can understand why an owner would think this way, by doing so they are limiting the benefits they can derive. If you think that the financial area of your company is only concerned with the so-called “necessary evil” of keeping financial records, you are missing something. A really good CFO (or Controller) will seek ways to improve and streamline processing, reduce costs, and identify opportunities to enhance efficiency. The idea that a CFO is merely overhead is pure fallacy.

Two, They Don’t Care About Sales

With this mindset it is easy to think that a CFO has no real interest in sales and marketing. While this is sometimes true, the right person will be greatly concerned with supporting the sales and marketing areas. In fact, they often can offer solid input (after all they are customers as well) and identify ways to finance the sales and marketing efforts needed to grow a company. When you hear them express concern about past due accounts, don’t make the assumption that they want to stop sales. On the contrary, they may well want to see resources used on customers who will actually pay you. In fact, these are the customers you want. Maybe that CFO is merely saying, “Hold on to the good customers, minimize the risk from the not so good customers, and look for more of the good.” Remember, eventually a sale must be converted to cash. See Cash Flow – The Bottom Line for more on this. Again, thinking a CFO doesn’t care about sales is another fallacy.

Three, They Are Obsessed with Control

While an element of control is important, I think what is often missed is that the CFO wants enough structure in the company to make it easier to monitor events and alert everyone to both potential pitfalls and opportunities. Even the creative process requires an element of structure, particularly when it comes time to fleshing out an idea to see if it is worth pursuing. If you think recognizing the need for adequate structure represents obsession with control, you are buying into another fallacy.

The Bottom Line

Yes, I know we talk about CFOs being bottom-line focused and there is some truth to that. But the bottom line here has to do with how you view your CFO. Do you see them as overhead and their role as a necessary evil, or do you expect that they will be able to make contributions in multiple areas?

Think about it. Is your company prone to putting the CFO off in a corner and only asked for input on rare occasions, or do you consider them a vital member of your team?

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.


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