In this blog, we outline the new CFO’s early priorities in their first 100 days; to make a positive impact and build a correctly prioritised plan.
We also float the idea of hiring an experienced part-time finance director. The new CFO will naturally want to make their mark with a strong start, but there is a lot to do in the early day. Hiring a part-time FD will give some breathing space, neutral support and ensure ‘business as usual’ within the finance function whilst the new CFO gets on with their immediate priorities.
Estimated reading time: 4:00 minutes
Over the last few years, the role of the Chief Financial Officer has changed. The historical tasks of the finance function, such as bookkeeping, financial reporting, and statutory compliance, continue to be essential. However, today’s CFOs are strategists with broader mandates and responsibility to create value and drive growth and improvement. They are an integral part of corporate decision making and accountable for the company’s overall performance.
Firstly, the new CFO needs to understand the company and the business environment
- They will need to establish if there is a crisis in the business from a financial perspective. If there is, then this needs addressing immediately.
- Review the financials, the board packs and minutes. Do they meet management, fiduciary and regulatory requirements?
- Ascertain where the business is up to in terms of the cash forecast. Is there sufficient cash for the business to operate?
- Understand the legal framework, including:
- Articles of association
- Other agreements, e.g., funding agreements
- Bank documentation
- Covenants including any actual or potential breaches
- What are the key terms of customer and supplier contracts
- Get to know the organisation, its vision, values and culture.
- Look at the strategic plans of the business and become familiar with the sector, market drivers, the company’s position in the market and the competition.
Secondly, they will need to walk, talk and listen
- Within the new CFO’s first 100 days, they will need to spend as much time as possible with the CEO and identify their priorities and expectations.
- Make the right connections with board members and stakeholders (this includes investors and shareholders as well as employees, customers and suppliers) and build rapport.
- Ascertain their needs, expectations, and honest views as a customer of the finance function.
- They will need to get to know the finance team and let them get to know their new CFO.
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Finally, they will need to start implementing best practices within the finance function
- Initiate a quality improvement programme to build a finance function that meets the needs of both its internal and external customers.
- Look at systems and processes – are they fit for purpose?
- Identify opportunities for automation, such as in transaction processing and approvals.
- Can the business data drive better decision making through the use of analytics tools like PowerBi?
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- Review the key financial controls within the business to identify risks and improvement opportunities. Implement quick fixes if gaping holes exist.
- Assess the finance team. Are the right people doing the right roles?
- Is there a solid financial controller in place? Someone who can enable the CFO to focus on strategic activities.
- Review the team in detail:
- Are the job roles appropriate?
- Is the team structured correctly?
- Are those in the posts performing to the required level?
CFOs are rarely granted the luxury of 100 free days to do all this, so why not bring in a part-time FD to assist?
Additional, experienced support from companies like iFD has many benefits in the CFO’s first 100 days. Often, a neutral, unbiased resource is better placed to undertake some of the immediate priorities:
For example:
- Undertaking due diligence of the finance function to highlight problems and recommend improvements.
- Reviewing the key financial controls within the business to identify gaps and recommend improvement opportunities.
- Evaluating the finance systems – are they fit for purpose? If not, what are the alternatives?
- Identifying what additional opportunities exist for automation and the use of data?
- Assessing the finance team in detail:
- Are the job roles appropriate?
- Is the team structured correctly?
- Are the right people doing the right roles?
- Are those in the posts performing to the required level?
This leaves the new CFO more time to engage with the CEO, the leadership team and external stakeholders and get to grips with their new organisation.
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