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Financial Insights

The Modern CFO: Profile of the Financial Iron Man

Finance leaders have been fighting for years for a seat at the strategic table. And while they've often been stuck as backward-looking scorekeepers, times are changing. The modern CFO should be the Iron Man of an organization—here's what that means.

Joe Garafalo

Founder and COO

Published on January 26, 2022
Financial Insights
The Modern CFO: Profile of the Financial Iron Man

If a company’s leadership team are the Avengers, the CFO should be its Iron Man. But rather than assuming a role as strategic leader in the organization, CFOs are often stuck in the background cranking away on backward-looking reports.

It’s time to change that. But how?

Finance leaders can earn their seat at the table by proactively taking a more strategic role in their business. To do that, the modern CFO has evolved far beyond the traditional record-keeping identity

Table of Contents

What Is the Role of the Modern CFO?

The modern CFO has to be an operator, an executive, a technologist, and an adviser to become a trusted decision-maker in their business.

It’s like when Captain America asks Tony Stark who he is when you take away the Iron Man suit. And, quick as ever, he says, “Genius, billionaire, playboy, philanthropist.”

Maybe the modern CFO doesn’t wear quite the same hats as Tony Stark, but you’re balancing multiple identities all the same. Take away all the financial models and what should we see? A strategic leader ready to steer your business down the right path to massive growth.

If you want to become a modern CFO—the kind who can make split-second, data-driven decisions in the best interests of your business—you need to play all four of these parts each and every day.

1. Operator

The modern CFO must have full control over the operational metrics that empower individual departments to meet their day-to-day objectives. Even as you shift your focus to more strategic thinking, you still need your finger on the pulse of tactical plans across the business.

As an operator, the modern CFO has three main objectives:

  • Track mission-critical metrics. For SaaS startups specifically, you need clear visibility into go-to-market metrics like MRR/ARR, customer lifetime value, customer acquisition cost, burn rate, runway, and net revenue retention.
  • Allocate budgets. Collaborate with individual department leaders to understand their short-term and long-term needs. Map that information against the company’s financials and set accurate budgets that help departments strike a balance between ambitious and realistic goals.
  • Implement cross-functional financial plans. Pull together budgets and financial plans for individual departments into an overarching model. A cross-functional approach ensures that financial plans don’t exist in silos, putting all departments on a path to meet business goals together.

You can’t carry out these tasks just by checking in on each department’s numbers every month. You need real-time insight into each corner of your business to have a meaningful impact as an operator.

2. Technologist

The modern CFO plugs into every tool that generates financial data across the business—the list of which gets longer every day.

As individual departments implement more and more SaaS tools to improve their workflows, your job gets harder. Now, it’s not just the ERP and payment systems you have to be fluent in—it’s the CRM and HRIS, too.

If you have Tony Stark levels of tech prowess (in addition to your financial expertise), this may not seem like such a big deal. But for most people trying to become a CFO, assuming this identity is a real challenge.

3. Executive

The modern CFO isn’t just heads-down in the numbers all day; they’re part people-ops manager, too. In addition to direct financial responsibilities, the modern CFO spends time:

  • Encouraging and planning career growth. In a SaaS business, head count is your biggest source of spend, and your people are your greatest asset. As CFO, you play a crucial role in retaining and developing up-and-coming talent across your team and other departments when opportunities present themselves.
  • Managing expectations across staff, the C-suite, and shareholders. You’re the reality check on the business. You rein in departmental hiring plans when they become too ambitious for the company to handle. You temper C-suite expectations by ensuring everyone is on the same page about the current state of the business. And you craft the financial story that keeps shareholders engaged in what you’re doing.
  • Enforcing cross-functional goals for the business. The modern CFO is the glue that holds all departments together. You make sure everyone is aligned on the cross-functional goals that drive sustainable growth.
  • Addressing board member feedback to inform business strategy. Whether board feedback is about product planning, pricing models, or financial forecasts, it’s the modern CFO’s job to address the concerns and provide the C-suite with strategic guidance.

4. Adviser

The modern CFO must assume the role of second-in-command to the CEO—the strategic adviser who offers proactive insight into the business.

For too long, the CFO has had to take a backward-facing approach to the business. Finance teams are constantly using data from previous months and quarters to forecast the future instead of using real-time actuals. Modern CFOs can’t assume the adviser role without a more proactive approach.

Tapping into real-time data gives you the insight necessary to identify obstacles and opportunities as your business grows. And that’s what helps you go from background hero along for the ride to front-line Avenger ready to lead the team.

The Modern CFO’s Tech Stack

So how can you effectively play the role of operator, technologist, executive, and adviser all at the same time? Modern CFOs need to assemble their own Iron Man suits with the technologies that make it easier—robotic process automation (RPA), artificial intelligence (AI) and machine learning, data visualization, and predictive analytics.

The modern CFO has to achieve a level of speed, accuracy, and agility that Excel spreadsheets can’t match. And the complexity of other traditional finance tools, such as your enterprise resource planning (ERP) system, only makes matters worse.

A suit of armor alone doesn’t define Tony Stark. However, it’s the Iron Man suit that gives him the power to take on any villain. Departments like sales and marketing have their own Iron Man suits, thanks to a renaissance of innovative software. But that renaissance left the finance function behind.

Now, finally, the wave of innovation has reached the CFO software stack, giving you technologies like:

  • RPA. Automate the collection and cleansing of data for financial reporting. According to McKinsey, 77% of time-consuming, backward-looking general accounting operations can be fully automated, freeing up hours of time you’d spend on manual data pulls.
  • AI and machine learning. Ingest financial data from across the business, and apply advanced algorithms to predict outcomes and model multiple scenarios. Instead of spending days or weeks recreating financial models, you can quickly forecast where your business is heading.
  • Data visualization. Make corporate finance more accessible by packaging data in ways that every stakeholder and contributor can understand. For the modern finance tech stack, these visualizations shouldn’t require the same level of technical engineering skill necessary to work with traditional business intelligence software. This is why purpose-built financial business intelligence is so important.
  • Predictive analytics. Analyze historical data to identify patterns and trends in your finances to help guide the business forward, rather than only summarizing the past. An Accenture study found that 53% of CFOs worry that their finance function is reactive. Predictive analytics give you the insights to be more proactive.

With all of these technologies at your disposal, there’s nothing stopping you from becoming a strategic leader in your business.

Strategic Finance Is the Moden CFO’s Arc Reactor

The Arc Reactor is the core of Tony Stark’s entire identity. It’s what keeps him alive and powers the Iron Man suit. What’s the equivalent for the modern CFO? Strategic finance.

What makes a good CFO isn’t necessarily a particular role or piece of technology—it’s the strategic finance mindset that pulls it all together to keep the business trending in the right direction.

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