There are many reasons why there is significant discussion around the evolving role of a Chief Financial Officer (CFO). One of those reasons is the advisory role that new-age CFOs have started to adopt in the organizational hierarchy.
However, that’s not where the matter ends. As more companies look into CFO mailing lists for shaping their B2B strategies, it becomes essential to understand all the excitement around them.
This article re-evaluates the answer to what is a CFO? In addition, their roles and how they help marketing efforts are also discussed.
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What is a CFO?
Source: CFO Strategies LLC
It’s not easy to capture the definition of a CFO in a single statement. This is due mainly to how dynamic the role is.
A few years ago, a general stereotype that most organizations believed in was that a CFO’s primary responsibility was to crunch numbers. That belief has now become a relic from a bygone age.
That is not to say that critical functions such as record keeping and financial reporting have become irrelevant. The sole difference is that these tasks are now viewed as the bare minimum for a CFO.
Today’s CFOs are visionaries that use financial data to help streamline organizational operations and decision-making. Some of the concerns that CFOs help address are as follows:
- What’s the subsequent business acquisition that a company should look toward?
- What does the current financial market mean for a company’s growth?
- What are some limitations that an upcoming budget should focus on?
To support this, in 2015, a KPMG study predicted this exact development. 63% of surveyed CEOs believed that the role of a CFO would increase significantly by 2018. The year is 2022 now. The projections did come true.
Thus, a precise answer to ‘what is a CFO‘ paints an incomplete picture. A multi-faceted perspective is the only way to understand what CFOs mean today.
Now that there is some foundation to stand on, the next logical area of examination would be the responsibilities of a CFO.
There are two categories of CFO roles and responsibilities.
The first category is comprehensive oversight over a company’s financial activities. The second and more emergent category is related to the advisory role that CFOs fill today. It’s vital to examine both.
1. Comprehensive Financial Oversight
As mentioned earlier, there are some critical functions that a CFO performs. These include the following:
- The selection of staff for an organization’s finance teams
- Aiding the heads of revenue generating departments to maximize output
- Limiting company expenses without impacting customer or employee satisfaction
More importantly, a CFO is also concerned with vital operations such as asset liquidity and financial reporting.
Liquidity, essentially, refers to the ability to pay off short-term liabilities with liquid assets. A CFO, then, ensures that a company can maintain a steady cash flow to meet all its financial obligations.
Additionally, CFOs help an organization’s leaders and stakeholders understand the company’s financial state. They sign off on the authenticity and accuracy of internal reports, including balance sheets and other fiscal statements.
2. Advisory and Strategic Role
This is where it gets interesting. In addition to those primary duties, CFOs emerge as advisors and financial strategists.
Today, a crucial responsibility for any CFO is to evaluate the returns on a company’s investments (ROI). CFOs determine whether it’s worth investing in new projects or acquisitions by carefully considering current developments. They are, as of now, filling the role of experts in the B2B industry.
Another dimension of CFO roles and responsibilities is the need to predict the financial future accurately.
By combining data from company’s past performance and current market developments, a CFO helps their company leaders and stakeholders estimate future revenue and expenses. They effectively outline the next few steps that an organization needs to take.
However, the central question still is: How exactly are these chief financial officer responsibilities related to successful marketing campaigns?
How Do CFOs Help Execute Successful Marketing Campaigns?
There hasn’t been enough literature written to overstate the importance of finance in marketing. Don’t get it wrong. There ‘are’ millions of reports on the topic. It’s just that millions aren’t enough in this context.
The two departments work in tandem. The CFO and the CMO (Chief Marketing Officer) are the new power couple. These, then, are just some of how a CFO strengthens any organization’s marketing efforts.
Let us look at some of the chief financial officer responsibilities as follows.
1. Bolstering Marketing Creativity with Financial Management
CFOs sit in a strategic position alongside the top management and leadership. They have access to intricate details about emerging financial developments in the current industry. Their knowledge, coupled with their management skills, is critical to a marketing team.
Consider what any marketing team’s primary responsibility is. It is the strategizing and conceptualization of effective campaigns. They don’t have the necessary skill to deal with budgetary issues or the financial aspects of a campaign. That is not even in their purview.
A CFO alleviates those concerns through budgetary checks and the allocation of funds. They help marketing campaigns stay relevant and on track.
2. Predetermining the Potential Success of Marketing Campaigns
Similar to how they help the top leadership, CFOs do the same for a marketing team.
A CMO has to look at multiple sources that provide relevant marketing data solutions to conceptualize campaigns. A CFO, however, relies on extensive financial data that promises more significant ROI.
Take this example. A marketing team has conceptualized a new campaign on online streaming services. The CFO, however, has access to exclusive financial data that says online streaming services are going to suffer a fiscal deficit for the following year.
Despite the projected financial risk, would it be a responsible decision to continue with a potentially expensive campaign? When considered, a CFO’s financial acumen will help a marketing team predetermine the potential success of their campaign.
3. Multichannel Growth and Synergy
What’s the primary reason for marketing something? While you think about that, ponder this as well: What does a CFO look for when considering company investment?
The answer to both is brand growth and increased ROI.
When CMOs and CFOs find a shared language, they end up helping each other. The CFO understands that an increased budget for a specific campaign will return more significant dividends for the company.
Similarly, a CMO gains insight into using that increase in budget to elevate the campaign’s visibility. Studies show that higher growth companies strongly align the CFO and the marketing team. By creating synergy with the marketing team, a CFO effectively boosts the company’s growth.
Now you have the answer to the question, “what is a CFO?” along with significant CFO roles and responsibilities.
Moreover, the importance of finance in marketing is something that people are still coming to grips with. After all, honest financial data can be hurtful at times. The new-age CFO, however, is strong enough to bear that burden.
Anthony Noto, the CEO of SoFi, has a beautiful quote regarding this. He says:
‘The only way people can be excellent is with truth, so you have to have a CFO who will have the intellectual capacity and conviction to tell you you’re wrong and try to support that with data.’