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10 habits of highly effective CFOs

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10 habits of highly effective CFOs

Anrok | Streamlined sales tax for SaaS

There are many ways that The 7 Habits of Highly Effective People falls short in practice. While the book provides a thoughtful framework on how to improve our general work ethic, it does not offer tactical advice that you can use in your specific role.

As a team that works with many CFOs, we collected essential habits and strategies of the brightest tech finance leaders. We distilled some of the secrets to their success so that you can see what goes on behind the scenes. And perhaps, even emulate some of them.

If there is one overarching theme across all the pieces of advice, it is one of collaboration — working with people across your organization.

“The fun thing about being in the CFO seat is that you are in the center of all information and money flows,” says Caitlin O’Neil, interim CFO at SaaSOptics + Chargify. “A lot of the role centers around people — both on your team and on other teams within the org — processes, and tools. This makes it vital to cultivate deep relationships across the organization, because you need to be working in lockstep with all of them.”

This collaborative approach should be the foundation that underlies other strategies for effectiveness. Read on to learn what those strategies look like.

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Table of contents

1. Establish a vision

A highly effective CFO can turn finance from a reporting function into a strategic one. Using financial analysis to forecast future revenues and game out various scenarios puts a CFO in a powerful position to inform decision-making. One example of a finance leader that bridged this gap was Ravi Gupta during his time at Instacart. His deep understanding of the business mechanics helped him become a strategic partner to the CEO and eventually also take on the role of COO. That’s why vision is what differentiates an average CFO and an exceptional one.

2. Cultivate precision

Financial information will be used to do all sorts of storytelling inside and outside of the organization, and the numbers are the bedrock on which those stories rest. It’s essential that they’re precise so that they can be relied upon to direct the company in the right direction. Understanding the present state of the company clearly is how a finance leader can most effectively drive the company towards success.

3. Prioritize organization

Finance teams for fast-growing companies must be both disciplined and agile, as well as coordinated with other teams like sales, marketing, and IT. As we detail in our white paper on this subject, you should divide your team into accounting and strategic finance sub-groups, work to integrate them with other functions at the company, ensure that they’re regularly preparing financial statements to ensure audit-preparedness, and keep your software stack and staffing plan updated to handle company growth.

4. Stay on top of new tools

Staying organized, ensuring precision, and doing forecasts are just some of the tasks that you’ll employ technology tools to accomplish. New tools with increasingly robust capabilities are constantly being developed, so you’ll want to make sure you know what’s available in the market and steer your team towards the most accurate and highest ROI tools. One example is tax automation, which can make a life-changing difference for your finance team.

5. Work as a strategic partner

To be as effective as possible, you’ll want to help the executive team understand the budget for the coming year and anticipate fundraising needs. This will require working closely across departments to forecast hiring and other requirements. Being proactive about company-building can showcase how finance can be a strategic partner to other teams.

6. Connect with the board and investors

As a key decisionmaker, you need to be connected with the other decisionmakers in the organization, including those beyond the executive suite. For example, the CFO plays an important role in growth fundraising rounds and has to manage existing and future investors alike. O’Neil emphasizes the importance of establishing a great relationship with your organization’s board and investors: “While Board meetings might only be once a quarter, I've found that having an open line of communication is key.

7. Maintain robust data

Highly effective CFOs maintain a deep reserve of benchmarking data, which can be deployed in a variety of ways to guide strategic moves. For example, it can be helpful to be able to pull comps to guide the company in making investments in other organizations. That said, every business is different, so benchmarks should only serve as a jumping off-point for first principles modeling and analysis.

8. Think ahead about growth

The best CFOs are always looking ahead to see how the company’s growth trajectory will influence needs and costs. You should set a reminder every three or six months to check in on headcount planning. If you anticipate the company may grow out of its offices, enroll in a virtual mailing service like Earth Class Mail to ensure you don’t miss any important notices. It’s also an easy way to streamline all snail mail correspondence and keep a record of what has been received.

9. Engage in knowledge sharing

Network regularly to stay up on what’s happening in finance, including connecting with people both on- and off-line. Communities like Airbase's Off the Ledger provide valuable spaces for knowledge-sharing among finance professionals at tech companies. Anrok hosts quarterly dinners in San Francisco (and will be expanding to other cities shortly). Contact us to be included on the invite for the next one!

10. Consult trusted advisors

Even those sitting in the executive suite need advice. David Eckstein, CFO of Menlo Security, recommends building your own set of advisors and consulting them regularly. Think of them as your own personal “board of directors,” people with solid experience to draw upon in advising you and an interest in helping you develop your career.

Following all of these strategies—or even some of them—will set you apart as one of the most highly effective CFOs out there. Not only will you help your organization thrive, you’ll also be crafting for yourself a satisfying and impactful work life.

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