How the Role of CFO is Changing

Illumeo Customer Success's Profile

The Chief Financial Officer (CFO) role has always been one of great importance but the role has actually increased in importance in the past decade, due in large part to the role of digital technology in most companies.  No longer is the CFO role a strictly functional one; the position is considered a strategic one that crosses into many departments outside of accounting and finance.

The ‘Old’ Role of CFO

In the past the CFO has played the part of the head accountant and primary bookkeeper for a company.  The CFO was responsible for gathering financial data and presenting financial reports to the CEO (Chief Executive Officer) and Board of Directors.  The role was a reactive one, meaning the CFO reacted to the needs of the CEO by providing what information and reports were requested. The CFO served as the head of the accounting department and met the textbook definition of an accountant including an office with a large desk, ten-key adding machine, ledger paper and pencils.

The Changing Role of the CFO

Today the CFO position is one that offers insight and strategic advice across many areas of a company.  The position of head accountant is still in place but there are added duties that have greatly expanded the job’s duties and level of importance to the organization.  The CFO position has become much broader and adds value to many areas. It is common for the CFO to take part in a company’s information technology plans, logistical decisions, social media platforms and corporate branding.  The job has changed from a reactive one (as defined above) to a proactive one that provides guidance and advice to the CEO and the Board of Directors. The CFO is actively involved in the early stages of planning and decision making for many areas of the business.

The Strategic Advisor Role of the CFO

The CFO position has become a much more collaborative one in recent years.  The CFO is expected to facilitate discussions and plans across multiple departments.  They are responsible for analyzing non-financial data and factors for departments outside of accounting to find areas of opportunity and growth and increased performance.  The CFO acts as the primary communicator linking outside departments to the accounting and finance departments to ensure they are receiving the data and information needed to enhance their own job responsibilities.  For example, the increased importance in social media presence and influence may require inclusion of financial reports and projections to promote the company. It is very feasible that the CFO would be responsible for working with the head of marketing to determine how this type of data could play a part of marketing and social media development to improve company growth opportunities.  Another example would be the collaboration required of the CFO with the information technology (IT) department. As the position is now more strategic, the CFO would work intimately with IT to develop systems to collect and analyze data and metrics to review current performance and identify new growth opportunities.

The role of CFO encompasses many areas outside of the accounting department.  It has become a value-added position for many organizations and is no longer considered a necessary but non-value-added administrative part of a company.