7 Strategic Questions To Determine If You Have A Strategic CFO

Wajiha Danish | July 22 2022

In today’s business world, it isn’t enough to have a CFO who excels in reporting and brings you key financial insights and data on a platter; they must do more. A CFO must be like a strategic partner who helps you make and implement winning strategies that enable your business to scale exponentially and accelerate success.

Recently, the role of a CFO has broadened beyond expectation, and like a business owner, the CFO also wears multiple hats. In reality, their responsibilities go beyond financial reporting. They also have to use the information they prepare to plot and plan the best path forward.

That said, a winning business needs to have a strategic CFO. But how can you know whether your CFO is a winner or just a jobber? It’s simple. Ask your CFO these seven strategic questions. A strategic CFO will be able to answer these questions with confidence. So, let’s dig into the seven strategic questions you need to ask your CFO to determine whether he is a strategic CFO or not.

1. What’s Your Plan for Company’s Growth?

Typically, a company can grow in one of two ways; organically or through acquisitions. The first implies growing through creating new products or finding new markets. A strategic CFO must be able to answer this question by identifying which path is best for your business, the pros and cons of the two, and the potential ROI. Furthermore, he should also be able to determine the funding opportunities to acquire the capital to grow.

Check out Nine Financial Reports Every CFO Needs to Make Strategic Decisions

2. What are the uncertainties, and how do you plan to overcome them?

A CFO is called a finance expert for a reason. No, it is not because they report finances. They are finance experts because they have their sights on the risks involved in running and growing a business. A strategic CFO must be able to help you identify the uncertainties involved and should be able to help you create a plan to mitigate the risks and evade uncertainties.

At times, uncertainties halt decision-making and put your business on the back foot. To ensure that doesn’t happen with you, you need to ask this question to your CFO.

3. What are the challenges to the company’s growth, and how do you plan to overcome them?

Yes, it is true that no matter what you do, you can’t avoid all obstacles. Expanding or growing a business is a gamble, and there are always some obstacles you have to cross to win. However, moving forward is unwise without knowing the possible challenges upfront.

That’s where the strategic CFO comes into play. The right guy must be able to identify the challenges to your company’s growth and help you find solutions to overcome them and ascend confidently. The obstacles may relate to negative cash flow, high market competition, or increased cost of goods. No matter the challenge, it is better to know about them before they brew disaster.

4. Which niche or sector is least productive in the company?

Nobody can say they have a 100% record in investments or that everything they invest in turns to gold. In reality, some investment works wonder, and some doesn’t work at all.

Often, businesses find themselves stuck in a loop where they continually pour money into areas that give little to no returns. Some go overboard with marketing, while others spend millions creating new markets. The only person who can tell you about the efficiency of your investments is a strategic CFO. So, ask!

Check out Financial Projection Guide for a Startup Business Plan

5. Are the business’s goals big enough?

Failure is not always the worst as it brings with a seed of opportunity – a chance for you to learn and grow. In contrast, setting and achieving goals that don’t match your caliber or underrate your business’s potential is no less than a sin.

Some are addicted to the rush of adrenaline they get when they achieve a milestone. However, the milestone itself should be worth it. You can’t just stick to goals like doubling revenue and expect to become an industry leader. You need to have a broader vision. The only person who can help you do so is a strategic CFO.

6. How much do we know about our competitors?

A strategic CFO must not merely know about your business, but he should have one eye on your competition to see new products they are developing and assess their plan of action. You can’t beat your competition without proper research, and a strategic CFO is the one who must conduct this research to keep you well-informed and possibly one step ahead.

7. What should our company stop doing?

This question could tell you the most about whether you have a strategic CFO or not. Ask your CFO to tell you about the things he feels the company is doing wrong. People often don’t tell these things due to fear of a fierce reaction. However, if you have an expert, you should learn to use his expertise in the best way to understand what your business is doing right and where it lacks.

Author Bio

Wajiha is a Brampton-based CPA, CGA, and Controller with 17+ years of experience in the financial services industry. She holds a Bachelor of Science Degree in Applied Accounting from Oxford Brookes University and is a Chartered Certified Accountant. Wajiha spearheads Monily as its Director and is a leader who excels in helping teams achieve excellence. She talks about business financial health, innovative accounting, and all things finances.