Learning to Think Like a CFO

Do you think like an accountant, or like the chief financial officer (CFO) of a large corporation? The majority of the people who work in the accounting industry think like accountants, which is a good thing. However, learning to think like a CFO has numerous benefits. Not only does it give you a better understanding of your company's financial needs, it helps you hone your leadership skills, making you a valuable asset to your company.

As the chief financial spokesperson for the company, a CFO manages the company's financial risks and supervises the finance department. Additionally, many CFOs sit on the company's board of directors. A lot of responsibilities come with the prestigious title, including:

• Financial planning and forecasting future business needs
• Record keeping
• Compiling financial reports for the company's chief executive officer (CEO) and board of directors
• Assisting in strategic and tactical matters that relate to budget management
• Compiling cost-benefit analyses
• Securing new sources of funding

Because a CFO has so many responsibilities covering a wide range of issues, the job requires a variety of business skills. To make important financial decisions, CFOs need to be able to see the big picture. According to Diane Albergo, manager of member career services at the Financial Executives Institute (FEI), thinking like a CFO means more than knowing the ABCs of accounting; you need to have a strong business sense. But how does having a strong business sense and being able to see the big picture benefit you in your current position?

The majority of accountants are analytical thinkers. While your analytical skill enables you to succeed in your current position, it may also put limits on how much your opinions are valued. Developing your soft skills, including communication skills, motivation skills, and interpersonal skills, helps you relate to employees in other departments and express your concerns and opinions to your company's decision makers.

Not only does developing your soft skills help you communicate better, it also gives you a better understanding of your company's financial priorities, strategic plans, and operational priorities, as well as the way these priorities affect your department. When you have the ability to see how the financial decisions you make will affect the departments you're working with, you can make informed decisions that will benefit both the company and its employees.

Most managers want to hire accountants with developed soft skills and technical skills, so learning to think like a CFO will help you advance your career. When you alter the way you view your company's financial issues and begin to look at things from a CFO's perspective, it won't take long for your boss to notice that you have the business skills needed to be in a leadership position.

(Photo courtesy of freedigitalphotos.net)