In most businesses up to $50M in annual revenue, the CEO owns the financial health of the company.
I know what you’re thinking.
Didn’t I delegate this responsibility to someone else?
What am I paying my CFO for then, if they aren’t in charge of our finances?
Stick with me here, because my case is a bit more nuanced than what you’re likely to hear anywhere else.
If you have a CFO, they should drive your company’s operations via its finances. They should provide data, context, and insights. They should raise red flags when things look concerning, and they should make recommendations that can help solve problems.
But your CFO does not run your business. If you’re the CEO, you do.
What I’ve seen time and time again is that too many CEOs abdicate control of their company’s cash and profitability to their finance department.
And the reality is that I’ve just described the best-case scenario for what a CFO will do for your team. If you run a smaller company with a fractional CFO or just have a Controller in place, you likely don’t have the financial horsepower to drive the business to make change. Identify problems, yes. Turn them around completely, no.
Your CFO isn’t going to cut salaries or increase pricing without your blessing. When finance is part of the overall business strategy, it’s the CEO’s job to step in and own it.
Nobody will ever care about your business as much as you do.
So don’t sit on the sidelines, then blame your finance team for shortcomings in your business.
Stay engaged, listen to recommendations from your team, and then take decisive action.
I am not suggesting that the members of your finance team don’t have real jobs or any responsibility. They do, and if you have a CFO on your team, they should be a senior leader who can drive their own function without constant oversight.
I’m simply saying that responsibility for the outcomes—revenue, profitability, and cash flow—do not solely rest with your finance team. They ultimately rest with you.
The relationship between CEO and CFO is critical to the overall success of your business. I recently co-hosted a webinar with our own CFO, Steve Chunias. Steve also leads our Finance Services division.
Together, we covered how to Recession-proof your business and how the executive and financial functions work together in real-time to make better decisions.