A strong business relationship built on good communication between the chief financial officer (CFO) and chief executive officer (CEO) is critical for any successful business. It is imperative to establish a trustworthy executive foundation your company can depend on.
More than ever, business operators look to CFOs for reliable business guidance. As critical members of the executive team, good communication between a CEO and CFO can promote transparency and improve financial success.
Here are the top 5 finance tasks and responsibilities that a CFO needs to convey to the CEO:
1. Financial Stability
A CFO aiming to advance their company will need to make strategic decisions by knowing how to analyze financial statements, and taking an active role in financial management. Advanced financial analysis skills and the ability to convey critical data are crucial for long-term stability both in job placement and resource allocations.
It is one of the job responsibilities of a chief financial officer to effectively relay the financial state of the company to the CEO, regardless of its economic condition. Communicating analytical insights with the CEO will strengthen business relations and practices. It is crucial that the CEO makes decisions with the financial realities of the company in mind.
2. Budget Management
The ability to analyze financial statements and the overall effectiveness of operations is an important job responsibility of the CFO. Verbalizing budgeting restraints, issues, or surpluses to the CEO allows for appropriate expenditures and builds a strong CFO/CEO relationship.
As the CFO is the trusted advisor of financial decisions, he or she must have a clear vision and direction to positively promote business decisions. Budget management communication helps develop a well-rounded view and projection of the business, and the CEO will be thankful for the guidance.
3. Business Adaptations
Today’s society is facing continuous technological innovations, and a successful CFO must be able to analyze the financial condition of a company in an evolutionary world. Old school methods analyzing financial tasks can stifle innovation and affect business relations.
A successful CFO should be digitally savvy, and confidently approach the CEO with fresh business solutions. A CFO must enable modernization and communicate progressive actions to the CEO to maintain stability in an evolving economic climate.
4. Board Reports
Conveying the financial performance of a business is a top priority of the CFO. Coordinating financial reports with the CEO guarantees there will be no confusion in board meetings. Key points should be clear and concise, focusing on quality financial statements that can be shared with diverse groups, especially within management.
High-level reports on financial developments help bridge communication gaps, and ensure that any questions can be easily addressed between executives. Preparing these reports in advance ensures that all financial records are in order and accurate, and that the executive team has the necessary data on hand to make appropriate management decisions.
5. Unpredictable Changes
Unexpected business events are inevitable, and a CFO must be prepared to report them. Ensuring the CEO stays informed will improve top-down management and inform financial decisions.
CEOs know their company must continuously evolve and adapt, and having a strong financial foundation will enforce a competitive advantage. An innovative CFO can provide solutions and alternate plans that allow for flexibility with unpredictable market fluctuations.
CFOs must be confident in their ability to articulate ideas to the CEO. Quantifying decisions can help build trust and confidence in the business relationship.
CEOs are relying more and more on CFOs as a right-hand partner and strategic coach in strategy development and financial execution. Collaborative skills are essential, and one executive role cannot function optimally without the other.
While the CEO and CFO have very different roles, both are essential for the financial success of a company. Building strong business relationships starts with a solid CEO/CFO dynamic. It is within the best interest of the financial department, and the entire company, to focus on solid executive communication.
It’s important to carry this level of communication to every aspect of your financial department, especially if you looking to grow your team through outsourcing. Are you looking to supplement your team at a lower cost? Contact NuVest Management Services to see how we can help you.