On CFO roles and priorities
Strategic planning is a vital part of any organization. Financial planning, with budgeting at its heart, is a key element of any strategic planning. Obtaining a good understanding of these points will help you to think more like a CFO. When you do, your actions will better align with the company’s financial goals, which is essential to success.
The role of the CFO has grown from financial reporting and controlling to more involvement in strategic planning. In fact, CFOs are often creating financial strategic plans that support and help execute the business strategy.
Adopting a CFO mind-set means applying CFO priorities to your decision making and business management. It’s helpful to consider the CFO role in strategic planning to appreciate those priorities. The CFO contributes to the organization’s financial planning that supports strategic goals. Essentially, CFOs work to maximize shareholder value. But they also recognize the connection between shareholder value and customer value. So a key priority for any CFO is aligning these two values.
Strategic planning and execution are of vital importance to all stakeholders of the organization — customers, shareholders, managers, employees, and suppliers. A strategic plan is how an organization intends to follow a direction to achieve its goals.
A CFO works closely with the CEO on several strategic planning issues. These include growth and profitability of the organization, enterprise risk management, investment planning, and resource allocation. For example, a CFO would decide whether the strategy requires an investment in research and development. Or the CFO might make decisions on how to acquire capital for a company expansion.
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