The best way to compare CFO vs controller is to understand their differences.

The chief financial officer (CFO) and controller collaborate closely in a business. On the other hand, they play quite different roles, though.

The chief financial officer (CFO) takes the aerial perspective from above the forest, while the financial controller is traveling through the woods to go from point A to point B. This is the simplest way to think about the distinctions between the jobs of the CFO and the financial controller.

The Main Differences of CFO vs Controller

Here are the key distinctions between a CFO and a controller.

Hierarchy of the Organization/Finance Team

The organizational hierarchy of a corporation places a CFO and a controller at various levels (or on its org chart).

Therefore, together with the CEO, COO, and any other executives who work in the c-suite, the CFO is an executive.

On the contrary hand, a controller is the head of a department in middle management.

Moreover, the controller is normally in charge of overseeing the accounting and finance division. While the CFO is in charge of overseeing the overall financial health of the business.

Necessary Skills

Both a controller and a CFO need different skill sets, yet they complement one another.

If both positions are present in a firm, they should cooperate to strengthen and support one another as they advance the business.

CFOs Skill Set

The strategic vision that guides a company’s expansion is developed by CFOs. They provide direction for the finance staff and influence the culture of the division.

Moreover, to create their suggestions and action plans for the future, they constantly monitor the horizon for prospective risks and possibilities

Many CFOs will also have accounting degrees and years of experience. CFOs need a deeper grasp of finance than is necessary for the controller role.

Finally, they place a lot more emphasis on capital markets, investment, and financial planning than they do on the regular accounting work required to keep their business running effectively.

Controller Skill Set

Ensuring ledgers are precise and systems are operating effectively takes up the majority of a controller’s time in the field. However, their area of responsibility is less than a CFO’s, despite the fact that they are in charge of some administrative tasks for the accounting staff.

As they are professionals in accounting, controllers must uphold compliance with all current Generally Accepted Accounting Principles (GAAP) and tax laws. In addition, this is a technical position that calls for awareness, focus, and accuracy.

In order to reduce the likelihood of accounting mistakes, irregularities, and fraud, financial controllers establish, monitor, and execute internal controls. Moreover, they provide reports that demonstrate the effectiveness of the controls, which the CFO uses to support forecasting and planning.

Objectives, Purpose, and Scope of the Job of CFO and Controller

A CFO’s and a controller’s jobs have quite distinct purposes, scopes, and objectives in addition to being at different management levels.

Of course, the two must cooperate inside the organization to achieve the same objectives. But in order to do so, their respective duties and functions must be fulfilled.

The CFO’s job is essentially future-focused. Therefore, the CFO uses their expertise in finance to advise stakeholders, foster growth, and foresee the company’s future. They must be able to recognize financial hazards and put strategies in place to protect the business from them.

Furthermore, the CFO’s leadership assists the CEO in making choices based on financial facts by leveraging their insights and financial know-how to understand the story or meaning behind the business’s numbers.

As the controller is in charge of developing, implementing, and supervising the functional rules and processes that gather, record, and report financial data, their job is more hands-on.

So, a controller is essential to a CFO’s ability to function.

The controller also maintains strong back office practices that uphold regulatory compliance, safeguard the business against fraud, and enhance the timeliness and accuracy of the business’s financial reporting.

Do I Require A Controller or A CFO?

Consider a controller if you:

• You need oversight and verification of your bookkeepers and accountants
• Require someone to supervise the closing of each financial month
• Make sure financial reports are correct
• You aim to have more stringent procedures to prevent errors, fraud, and security lapses
• You are ready to relinquish your accounting involvement
• Need during tax season someone to help the CPA

Consider hiring a CFO if you:

• Search for an executive to work with the company strategy
• Need assistance handling cash flow issues
• Are uncertain about the best financial plan for your business
• You require higher-level reporting and analysis to inform business choices.
• Are Looking for assistance with a turnaround or staff reduction plan
• Would like to strengthen connections with lenders and investors
• Need help with loan or equity activities

Can A Business Have Both A CFO and A Controller?

Absolutely! The most prosperous companies have a CFO and a controller on staff, and most of the bigger companies do have both.

The issue is that many small and medium-sized enterprises simply do not have the financial means to bear the expense of employing skilled candidates to fill these high-paying roles.

However, failing to oversee a company’s financial operations or financial strategy, much less even both, can lead to significant cash flow issues, money being wasted, operational inefficiency, inaccurate data, reporting problems, a lack of concise direction, and a host of other issues that can cause the business to face unneeded challenges.

The Bottom Line – CFO vs Controller

You can acknowledge that, at least when your business is still young, it’s simple to see how one individual might perform both duties concurrently. The distinction of CFO vs controller appears insignificant at first because of how much their tasks and responsibilities overlap.

Yet when the company expands, both of these soon become necessary.

A CFO is a priceless investment if you require a point person for financial strategy and a face for fundraising or investment. A controller who can guarantee accurate financial reporting that serves as the cornerstone for future planning and growth is as crucial, if not initially more so.

Finally, if you have a goal to become an FP&A leader, controller, or CFO expert you can take my course and gain an advantage over others.

When the cost of products and services rises broadly, as opposed to just for a few specific things, it is said to be experiencing inflation. This means that today, for one euro, you may get less than you could before.

If you work in finance, continue reading to learn what you can do.

What Is Inflation?

The term “inflation” refers to an increase in prices, which over time, results in a loss of buying power. The average price rise of a selection of products and services over time can serve as a proxy for the pace at which buying power declines.

A unit of currency essentially buys less as a result of the increase in pricing, which is sometimes stated as a percentage. Deflation, which happens when prices fall and buying power rises, can be compared to inflation.

Here are the advantages and disadvantages of inflation.

Pros

• Increases the value of items upon resale
• Inflation at its ideal level stimulates expenditure

Cons

• Purchasers must spend more money on goods and services.
• Increase prices for the economy
• Increases some costs earlier than others

#1: Review Your Financial Models

First, you need to revise the models you have used by adding the macro economical factors:

Update the following assumptions:

• Salary increase
• Energy increase
• Material prices
• External services
• Rent
• Contractors

Once you reassess the impact of the cost increase, you assess the impact on your profitability, and we can go to the next part: review your pricing strategy.

#2: Review Your Pricing Strategy

Bring the results of your financial models into a discussion with the sales and marketing team. Then, together, you need to define what is the new pricing strategy to deal with inflation.

Help the sales team prepare their arguments for their negotiation with the client. Also, back up your inflation assumptions with external sources (energy index price, raw material market price, economical inflation index of your region…)

#3: Review Your Product Mix

Calculate the new margin per product using the new price and new costs.

Additionally, reassess the product mix to optimize the products with the highest margin contribution.

#4: Implement A Performance Plan

Pricing will not be the solution to cover all the costs increase.

Therefore, you need to run a performance plan with all departments to limit the cost effects:

• Trim your external services
• Use the advantage of the ways of working to reduce surface
• Review all your software licenses and check for duplicates or licenses barely used
• Streamline the span and layers of your organization
• Use the Zero Based Budgeting to identify savings
• Run an energy-saving plan

#5: Review Your Contracts

• Check existing sales contracts for existing price revision clauses and discuss with your clients to activate the clause.
• For new contracts, make sure you have a clause of price revision.
• Where you are on the purchaser side, negotiate to limit the inflation effect by finding other levers (payment terms, volume, long-term agreement).

What Impact Does Inflation Have?

There are several ways that inflation may impact the economy. For instance, if inflation weakens a country’s currency, exporters may profit since their products will be more competitively priced when expressed in the currencies of other countries.

On the other hand, this can hurt importers by raising the cost of items created elsewhere. Higher inflation might boost expenditure because people would try to buy things as soon as possible before their prices continue to climb.

However, savers can see a decline in the actual worth of their assets, restricting their capacity to consume or make investments in the future.

Is Inflation Beneficial or Detrimental?

The widespread consensus is that both too much and too little inflation are damaging to an economy. Many economists support a middle-ground rate of inflation of 2% annually or less, which they consider to be low to moderate.

In general, rising inflation is bad for savers since it reduces the purchase value of their savings. The fact that their outstanding loans’ inflation-adjusted values decline over time, however, might be advantageous to borrowers.

The Bottom Line – Handling Inflation Is A Top Priority

Inflation is widespread, and it is very important how you handle this. Therefore, stick to these five important steps.

• Review your financial models
• Review your pricing strategy
• Review your product mix
• Implement a performance plan
• Review your contracts

However, this situation is new for most of us, and we are all learning how to deal with it.

Finally, if you want to receive more finance tips like this, feel free to sign up for my newsletter. If you subscribe, every two weeks, you will receive an email from where I share best practices, career advice, templates, and insights for finance professionals.

Data analysis has become an essential tool for making informed decisions in the world of finance. But with so many types of data analysis available, it can be overwhelming to know where to start. Therefore, I will present you the 4 types of Data Analysis.

To help you understand the different methods of data analysis, I have outlined the four main types:

1. Descriptive
2. Diagnostic
3. Predictive
4. Prescriptive

1. Descriptive Analysis

In this analysis, you measure what happened. It provides an overview of the current situation, allowing you to understand the facts without any interpretation.

Furthermore, to get the most value from descriptive analysis, start by clearly defining what you want to learn and what data you need to gather.

Then, focus on collecting accurate and complete data, and use clear and concise language to present your findings. However, ensure to include any relevant trends, patterns, or anomalies to help others understand your results.

Example of descriptive analysis:

• Actual vs Budget financial statements
• KPIs
• Headcount reporting

How to start a descriptive analysis?

• Start by defining the key metrics and KPIs you want to measure.
• Gather data related to these metrics and KPIs.
• Use basic statistical techniques like mean, median, and mode to describe the data.
• Visualize the data using charts and graphs to help you understand and communicate the results.

2. Diagnostic Analysis

Here the goal is to understand what happened. In other words, this is where you drill down, filter and use 80/20 analysis to understand the cause of what happened.

Above all, use clear and concise language to present your findings, and be sure to highlight any important patterns or trends. In addition, to ensure the accuracy of your analysis, cross-check your results with other sources and consider seeking feedback from others.

For example, performing a Price Volume Mix analysis on revenue is also a diagnostic analysis.

How to start a diagnostic analysis?

• Start by defining the problem or issue you want to understand.
• Then, gather and analyze data related to the problem.
• Use advanced statistical techniques like regression analysis and correlation analysis to understand the relationships between different variables.
• Utilize 80/20 analysis and drill-down techniques to identify root causes.

3. Predictive Analysis

This is looking into the future to predict what will probably happen. It is done through forecasting, using statistical models that are reviewed and adjusted based on recent business events.

Additionally, this is when you forecast your cash flow for the next month or your production output based on a statistical model and adapted after manual review based on the latest business events.

Also, to maximize the benefits of predictive analysis, start by clearly defining what you want to predict and what data you need to gather.

Moreover, consider using multiple forecasting techniques and models, and be sure to validate your results by cross-checking with other sources.

Finally, be transparent about any assumptions and uncertainties in your analysis and clearly communicate your results to others.

How to build a predictive analysis?

• Start by defining the future event or outcome you want to predict.
• In addition, gather historical data related to the event or outcome.
• Use statistical models like regression analysis, time series analysis, or machine learning algorithms to make predictions.
• Validate the predictions and refine the model as needed.

4. Prescriptive Analysis

The prescriptive analysis is the most challenging type out of the 4 types of data analysis to implement, but it’s also the most valuable. Here you analyze which factor to use to reach an output in a particular scenario.

It focuses on finding actionable insights based on the combination of diagnostic and predictive analysis.

Therefore, to get the most from prescriptive analysis, start by clearly defining the outcome you want to achieve and what data you need to gather. In addition, consider using a combination of predictive and diagnostic analysis to identify the factors that will have the biggest impact on your desired outcome.

Finally, be sure to communicate your findings and recommendations in a clear and concise manner, and be prepared to adjust your analysis as needed based on feedback and new data.

An example would be a model suggesting the most cost and time-efficient levers to activate in a website to convert more sales in order to increase the revenue of the week on a specific product.

How to model a prescriptive analysis?

• Start by defining the desired outcome.
• Gather and analyze data related to the problem and potential solutions.
• Use advanced analytical techniques like simulation and optimization to determine the best course of action.
• Implement the recommended solution and monitor its impact.

Conclusion: Increase Your Use of Data Analysis with The 4 Types of Data Analysis

Understanding the 4 types of data analysis is crucial for finance professionals to make informed decisions.

• Descriptive analysis helps you understand the facts.
• Diagnostic analysis helps you understand why things are happening.
• Predictive helps you forecast what will happen.
• Prescriptive analysis drives better outcomes for your organization

You will want your team and your organization to start by getting the descriptive and diagnostic analysis right and automated.

Then, you need to start increasing the value of your analysis by creating more predictive and prescriptive analysis.

Most importantly, the key to success in each of these analyses is to start with clear goals and a focus on accuracy and transparency.

Furthermore, here are 3 articles from my blog that could be helpful for you:

• The Most Important KPIs in Finance and FP&A
• How To Turn Data Into Insights
• 3 Ways to Change Job in Finance

Feel stagnant in your career? Want to become irreplaceable? Want a big promotion?

By taking my course will have everything you need to become A finance professional!

Combining accounting data into a standardized set of financials is part of the process of creating financial statements. Subsequently, you send the statements to management, creditors, borrowers, and investors, who use them to assess the company’s performance, liquidity, and cash flows.

The steps below are part of the process of creating financial statements.

What Are Financial Statements?

Financial statements are a set of summaries of information regarding the cash flows, financial status, and financial outcomes of an organization. They consist of the cash flow statement, balance sheet, and income statement. To guarantee accuracy and for tax, financing, or investment purposes, financial statements are frequently audited by government entities, accountants, corporations, etc.

The Most Important Financial Statements

The three most common and significant statements are the balance sheet, income statement, and statement of cash flows.

• Balance sheet – It is a summary of a company’s assets, liabilities, and shareholder’s equity at a specific time. You may find out when the snapshot was taken by looking at the date at the top of the balance sheet, which is often the conclusion of the reporting period.
• The income statement – In contrast to the balance sheet, the income statement covers a period of time, often a year for yearly statements and a quarter for quarterly financial statements. An income statement is a summary of sales, costs, net income, and profits per share.
• The cash flow statement – CFS measures how effectively a business earns cash to cover debt payments, operational costs, and investments. The cash flow statement enhances the balance sheet and income statement.

What Are The Benefits?

Here are the benefits of the financial statements.

• To assess a company’s capacity for producing cash as well as the sources and use of that cash.
• To establish if a company has the ability to pay down its obligations.
• To monitor financial outcomes over time in order to identify any potential problems with profitability.
• To calculate ratios from the financial statements that you can use to assess the state of the company.
• Furthermore, to look into specific commercial transactions that are present in the disclosures that go along with the statements.
• To serve as the foundation for an annual report that is sent to the business’s shareholders and the wider financial community.

Steps in Creating Financial Statements

1. Collect financial information: Gather all documents, including bank statements, invoices, tax returns, and balance sheets.
2. Analyze the data: Review the financial data to determine trends, patterns, and any potential areas of concern.
3. Prepare the statement of financial position: Create a statement of financial position, also known as a balance sheet. It shows the company’s assets, liabilities, and equity.
4. Prepare the statement of income and expenses: Create a statement of income and expenses, also known as an income statement. It shows the company’s revenues and expenses over a period of time.
5. Prepare the statement of cash flows: Create a statement of cash flows that shows the company’s cash inflows and outflows over a period of time.
6. Prepare the statement of changes in equity: Create a statement of changes in equity, which shows the changes in the company’s equity over a period of time.
7. Present the financial statements: Present the statements in a format that is easily understandable to the user.
8. Analyze and interpret the financial statements: Review and analyze the statements to identify any potential areas of concern and make any necessary adjustments.
9. Prepare the notes to the financial statements: Create a set of notes to the statements. It will explain any assumptions, methods, and policies used in preparing the statements.

Conclusion

Ultimately, The key to an external assessment of a firm’s performance is its financial statements. The income statement provides information on a firm’s profitability. At the same time, the balance sheet provides information on the liquidity and solvency of the organization. By keeping track of the sources and uses of cash, a statement of cash flow links these two together. As a result, these, taken as a whole, show how a business is doing over time and in comparison to its rivals.

If you want to receive more finance tips like this, feel free to sign up for my newsletter. If you subscribe, every two weeks, you will receive an email from where I share best practices, career advice, templates, and insights for Finance Professionals.

Key Takeaways

• Financial statements summarize financial data for assessment.
• Key statements are the balance sheet, income statement, and statement of cash flows.
• Financial statements provide insights into performance, liquidity, and solvency.
• The statements are crucial for decision-making, assessments, and comparisons.

FAQ

1. What are financial statements and why are they important?

• Financial statements are standardized summaries of an organization’s financial data, including cash flows, financial status, and outcomes. They are crucial for assessing a company’s performance, liquidity, and cash flows.

2. What are the key financial statements?

• The key financial statements are the balance sheet, income statement, and statement of cash flows.

3. What information does each financial statement provide?

• The balance sheet provides a snapshot of a company’s assets, liabilities, and shareholders’ equity.
• The income statement summarizes sales, costs, net income, and profits over a period.
• The statement of cash flows measures cash earned and used for debts, operations, and investments.

4. Why are financial statements beneficial?

• They offer benefits such as assessing cash generation, and obligations, monitoring performance, calculating ratios, analyzing transactions, and serving as a foundation for reports.

5. What are the steps in creating them?

• The steps include collecting financial data, analyzing trends, preparing statements (balance sheet, income statement, cash flow), presenting, analyzing, adjusting, and adding explanatory notes.

Jobs in the financial industry may be quite profitable, which adds to the explanation of why they are so in demand. Of course, getting a job in the banking industry is difficult—the admission requirements might be as high as the pay. Many professionals have postgraduate degrees in business, math, economics, or statistics, and the majority of occupations demand at least a four-year degree. Furthermore, it is essential to follow career advice to stay on the right path.

However, it goes without saying that more than just getting good marks is necessary to have a successful career in Finance. Therefore, can you remember what made you decide to pursue this job path, whether you’re just starting out or a seasoned executive?

Accounting and financial professionals must exhibit a variety of talents in today’s quickly changing workplace, including accounting skills, excellent soft skills, razor-sharp analytical ability, and a solid grasp of industry-standard software.

What Does Finance Involve?

The field of Finance focuses on managing money and how it is obtained and spent by a person, business, or government organization. This area may cover budgeting, borrowing, lending, and investing. Important facets of the financial industry include investment banking, risk assessment, financial engineering, and stockbroking.

Those who work in this sector may examine these markets and the way that money moves through the economy. The term “finance” may also refer to the entire system of financial markets that control the movement of money.

Pros and Cons of Working in Finance

Here are the advantages and disadvantages of working as a Finance professional.

Pros of A Finance Career

• Excellent income and rewards – At all levels of the sector, there is potential for higher-than-average pay, along with a good career path, excellent perks, and bonuses. City-based businesses frequently provide wellness perks to hard-working staff, such as free gym membership, access to nutritious food, and healthcare.
• Job security – Due to its high demand and ongoing growth, this field of work offers a steady career. Therefore, there are a variety of jobs available. The Bureau of Labor Statistics (BLS) projects that this industry will grow by 5% during the following ten years. Your depth of specific expertise increases with time, elevating your value as an employee. As a result, a career in Finance might be described as secure.
• Variety – There will never be two identical days. You’ll always be active and pick up new skills due to the industry’s quick speed and unpredictability. There won’t be time for clock-watching because the office is likely to be buzzing with excitement.
• Career development – There are many prospects for growth and promotion in a career in Finance. There are many possibilities for you to grow in your job, and that too fast, after you’ve successfully entered the market. Top-tier roles are usually easy to fill. Given that this professional route does not confine you to a particular region, you might also investigate chances abroad. Moreover, you might pursue employment with businesses like the World Bank. In addition to this, you can open your own business.
• Job satisfaction – Finance professionals have among the greatest levels of work satisfaction because of their extraordinary salaries, job stability, and possibilities for professional development.

Cons of A Finance Career

• Long hours – Financial professionals often put in more than 40 hours each week, including weekends. Working between 50 and 70 hours a week is also very typical. For investment bankers, the range is 100. Therefore, there is a lot of pressure to persevere and achieve your goals in your early years. Consequently, maintaining a balance between work and life becomes challenging. Additionally, this occupation severely impacts your personal life because it is difficult to find time for your friends, family, and yourself.
• Relatively stressful – Challenges and stress are both present in the financial services industry. The workload changes significantly since many vocations are seasonal. Additionally, the clients, stocks, and quotas that drive a career in this sector change regularly. Such adjustments demand a lot of mental fortitude to handle. Many people succumb to the pressure, which puts their jobs in danger. Aside from this, a lot of outside variables affect your career here. Political changes, interest rates, and worldwide pandemics all play a huge effect, to use the stock market as an example.
• Tough and ongoing education – Even while the employment market is diverse and poised to grow, not everyone should pursue the necessary education to enter it. Finance is regarded as a challenging major on a global scale. Obtaining a license or the necessary credentials requires a significant amount of time and effort. Additionally, the examinations are really difficult. Complex mathematical formulas and financial jargon may be very intimidating. Furthermore, once you have a degree, your education doesn’t end. You must continuously refresh yourself by enrolling in appropriate courses if you want to keep up with the ever-changing industry.

Top 10 Career Advice for Finance Professionals

Here are my top ten career advice in Finance.

Ground Career Advice – Build A Strong Foundation in Finance and Accounting Principles

Having a strong foundation in finance and accounting principles is essential for success in any finance career. Make sure you have a good understanding of financial statements, budgeting, financial analysis, and other key concepts.

Network and Build Relationships

Building relationships with other finance professionals, both within and outside your organization, can be extremely beneficial for your career. Networking can help you stay up to date on industry trends, find new job opportunities, and gain valuable insights and advice from others in the field.

Another Career Advice – Stay Current

The world of Finance is constantly changing, so it’s important to stay current on industry developments and trends. Consider taking continuing education courses or earning additional certifications to keep your skills and knowledge up to date.

Be Detail-Oriented and Analytical

Finance professionals need to be detail-oriented and analytical in order to be successful. Pay close attention to the details of your work and use your analytical skills to make informed decisions.

Significant Career Advice – Develop Strong Communication Skills

In Finance, it’s important to be able to communicate complex financial concepts and information in a clear and concise manner. Developing strong communication skills will help you effectively present financial information to both internal and external stakeholders.

Take on Additional Responsibilities

Showing a willingness to take on additional responsibilities and projects can help you stand out and advance your career. Look for opportunities to volunteer for new projects or take on additional duties, even if they are outside your comfort zone.

Important Career Advice – Be Proactive

 Don’t wait for opportunities to come to you – be proactive in seeking out new challenges and opportunities for growth. This might involve seeking out additional training or education, networking with industry professionals, or taking on new responsibilities at work.

Specialize in A Particular Area of Finance

There are many different areas within Finance, such as investment banking, corporate Finance, and financial planning. Consider specializing in a particular area of Finance that interests you and aligns with your strengths and career goals.

Be Ethical

Ethics are of the utmost importance in the finance industry. Make sure you always follow ethical guidelines and principles and avoid any actions that could be perceived as unethical or dishonest.

Seek Out Mentors and Role Models

Having a mentor or role model can be incredibly helpful as you navigate your finance career. Look for someone who is experienced in the field and can provide guidance and advice on your career path.

The Bottom Line – Follow My Career Advice to Reach Success

Financial careers frequently include high entrance barriers, intense competition for qualified candidates, and significant levels of stress. Nevertheless, these positions have many benefits, such as a demanding workplace, connection with smart and highly driven coworkers, chances for growth, and high income. Although many people enter the financial industry for monetary possibilities, those who succeed tend to have a clear love for what they do. Above all, follow my advice to ensure you are on the right path!

Finally, if you are interested in pursuing a career in Finance, you can take my course to ensure you have all you need to become a Finance Professional.

Everyone wants to succeed, even if it’s on their own terms, in the competitive event of obtaining greater career opportunities and progress. Being on the wrong track makes winning challenges. Therefore, I decided to make this blog post and show you how to improve as a global finance professional.

Improving As a Global Finance Professional – 3 Must-learn Skills

Although it will be an exciting and financially rewarding path, it may be challenging to perform effectively and advance your career in the finance industry. Simply put,  given the vast quantity of data and cutting-edge technologies, it’s hard to make progress instantly. However, I have listed in this document the skills you need to develop to accelerate your career in Finance.

1. Analysis Skills

Being a good analyst is one of the most important things in order to advance as a global finance professional. Learn how to use the right analysis methods such as:

• Price Volume Mix
• Sensitivity analysis
• Variance analysis
• Horizontal analysis
• Vertical analysis

2. Accounting

To understand the impact of business events on financials, you need a basic understanding of accounting and learn how the three statements (P&L, Balance Sheet, and Cash Flow) work together. That being said, it’s clear that accounting plays a big role in the whole process of becoming better on a big scale.

3. Soft Skills

Develop the following soft skills to deliver value to your organization:

• Communication (written and verbal)
• Interpersonal
• Influencing
• Put yourself in other people’s shoes

Conclusion on Improving the Global Finance Professional

Many people may have aspirations of achieving a successful financial career, and the secret to that is going on the proper course. Start by building a strong foundation by seeking advanced knowledge and abilities in your profession, then take baby steps towards your objective of a long-lasting career.

Therefore, if you are willing to develop your analysis skills, I am here to help you. I have a program to help finance professionals upskill themselves and accelerate their careers. Feel free to check my online course.

Finance presentations are an important tool for businesses, investors, and other stakeholders to understand the financial health and performance of an organization.

However, making mistakes during these presentations can lead to misunderstandings and poor decision-making. This can be detrimental to the organization and can even result in financial loss.

In this article, we will discuss some common mistakes that people make in finance presentations and how to avoid them.

By being aware of these mistakes and taking steps to prevent them, you can ensure that your finance presentations are effective and provide the information that your audience needs.

If you want to be a great finance business partner, I am going to show you the mistakes to avoid and how to lead a presentation.

Where did I learn this? Over the last 14 years, I have had many presentations with top executives (CEO and CFO of companies I audited as well as country, BL, and GBU management of a multinational company).

5 Mistakes in Finance Presentations

Here are the five mistakes I learned to avoid and what to do instead.

#1: Come to The Meeting Only with Problems

Instead, propose solutions to discuss in the meeting and use the meeting to decide on which actions to take to remediate the problems.

#2: Not Anticipating Questions Is Also Part of The Mistakes in Finance Presentations

Instead, think about which questions can pop up and have the answer ready in backup, in your working files, or in your head.

#3: Ignoring Actions Which Are Not Finance Related

Instead, be the right hand of management and follow up on all the actions to make sure the teams are working on the topics with the highest priority.

#4: Organize boring and non efficient meetings

Instead, follow this structure:

• Have an agenda and communicate it in advance
• Share the materials 24h in advance
• Moderate the meeting with the goal of progressing through the agenda
• Do timekeeping
• Park questions and topics which need to be taken offline
• Document minutes, decisions, and actions plan
• At the end, ask everybody to debrief about the meeting

#5: Refuse to Change The Format of The Meeting

Instead, challenge the status quo. First, remove unnecessary slides and bring a dynamic file or dashboard for drill-down analysis. Second, reduce the time used for the meeting. Additionally, use the feedback slot at the end of the meeting to improve it for next time. Finally, reduce the frequency of the meeting (sometimes, an update email could be enough).

The Bottom Line – Prevent Mistakes in Finance Presentations

By being aware of these mistakes and taking steps to prevent them, you can ensure that your finance presentations are effective and provide the information that your audience needs.

If you have bad news to announce, don’t wait for the meeting, and call or email directly your trusted point of contact. Nobody likes bad surprises and even less when they are hidden from them.

If you want to receive more finance tips like this, feel free to sign up for my newsletter. If you subscribe, every 2 weeks, you will receive an email from where I share best practices, career advices, templates, and insights for Finance Professionals.

Working capital is the amount of money that a business needs to cover its short-term expenses, such as inventory, salaries, and taxes. A working capital requirement is the minimum amount of working capital that a business needs to have on hand to maintain its operations and meet its financial obligations.

Therefore, determining a business’s working capital requirement is an important part of financial planning and management. A business with insufficient working capital may struggle to pay its bills and meet its obligations, which can negatively impact its operations and profitability.

On the other hand, a business with excess working capital may be missing out on opportunities to invest or grow its business.

To determine a business’s working capital requirement, a financial manager will typically review the business’s current assets, such as cash, accounts receivable, and inventory, and compare them to its current liabilities, such as accounts payable, taxes, and debt payments.

5 Reasons Why Is Working Capital Requirement Important

Here are the five reasons why you need Working Capital Requirement and its effect on cash.

#1: Changes in working capital requirement (WCR) have a direct impact on your cash balance.
When WCR goes up, cash goes down.
When WCR goes down, cash goes up.

#2: Analyzing WCR allows you to identify old receivable balances & increase stock balances.
You will prevent unexpected depreciation of old items thanks to a timely review.

#3: WCR is a good indicator of financing needs for growing companies.
See how your WCR is changing and compare it with your growth. Then, plan your WCR based on your growth forecasts & secure the required financing.

#4: Identify the impact of your supply chain plan on your cash.
Reviewing your inventory level informs you of the effect of supply chain decisions on your cash. After that, align priorities: client delivery, lead time & financing capabilities.

#5: Your clients & suppliers payment terms will directly impact your receivables & payables balances.
Paying your suppliers too early & allowing long payment terms to your clients will limit your cash position. Additionally, manage it well & you will be less dependent on external financing!

The Bottom Line

Above all, this analysis can help identify any potential shortfalls in working capital and provide insights into how the business can improve its financial health and stability. How do you analyze WCR, and how is Finance involved in this topic?

To obtain more expert finance knowledge, you can take my course.

Transitioning from a career in accounting to finance can be an exciting and rewarding move. While both fields share some common ground, finance offers a broader range of opportunities and challenges for professionals with a background in accounting.

If you are considering making the transition from accounting to finance, there are key steps you need to take to set yourself up for success.

10 Key Steps to Transition to Finance

Here are the steps to  successfully transition to Finance:

#1: Understand What Finance Is About

Finance is not just about money. It’s really about optimizing existing resources and capitalizing on opportunities for growth. In other words, in finance roles, you will spend a lot of time working with people outside of your finance department.

#2: Know Your Strengths

Your accounting and quantitative skills will greatly assist any finance role.

#3: Develop Your Analytical Skills

Learn when and how to use key analysis methods, such as Price Volume Mix and Scenario Modeling.

#4: Work on Your Soft Skills to Transition to Finance

Developing certain soft skills, like Storytelling and Communication, will help you in your transition.

#5: Invest in Continuing Education

Certificates are good, but practical training is better. Therefore, get out of your comfort zone to take on different assignments whenever possible.

#6: Target The Right Responsibilities

Focus on responsibilities first rather than titles.

#7: Start Your Transition to Finance Where You Are

You have more chances of learning new skills within your existing organization than elsewhere, so start growing where you are.

#8: Find A Mentor or Career Strategist

Finding the right success partners will help you in the long run. Especially if they already went down your desired path.

#9: Grow and Cherish Your Network

Networking can bring you new ideas, meaningful friendships, as well as valuable advice about conquering obstacles you may face in your career.

#10: Have a Lifelong Learning Strategy

Developing professional skills should not only happen in formal education settings. There are several ways you can set yourself up for success.

The Bottom Line – Start Your Transition to Finance Today!

In conclusion, with dedication and hard work, you can successfully transition from accounting to finance and take your career to the next level.

Wassia and I worked together to prepare this mini-guide. Our goal was to help and inspire people who want to transition to finance.

So, in this document, we share the following:

• Our personal stories of how we went from Accounting to Finance
• Our recommendations on how you could do the same.

Furthermore, what makes this extra collaboration special is that:

• Wassia and I both speak French
• Also, we both worked at some point for PwC
• We both worked at some point for a German Company
• We both earned our MBA from US State universities and lived only a few hours away from each other without knowing each other.
• And most importantly, we both successfully transitioned from Accounting to Finance on two different continents.

Finally, I am grateful to Wassia, who approached me to make this collaboration and provide a guide to help finance professionals transition towards a new career!

If you had a career change, let us know what worked best for you. Also, if you are interested in more finance insight and knowledge, you can take my course.

To become a successful CFO ( Chief Financial Officer), you will need to have a strong background in finance and business.

A common path to becoming a CFO is to start by earning a bachelor’s degree in finance or accounting. From there, you can gain experience in the field through internships and entry-level positions in finance.

As you gain experience, you can move up the ranks to positions like controller. Having manager roles is an important step prior to being a CFO

Additionally, earning a master’s degree in business administration (MBA) can also be helpful in preparing for a CFO position. In addition to education and experience, a CFO should have strong leadership and communication skills. Also, a thorough understanding of financial regulations and compliance.

But do you know there are five types of CFO?

The Five Different Types of A Successful CFO

Here are the five different types of CFO.

CFO of A Listed Company

The focus will be to manage the shareholders and launch strategic plans within the group.

Here are the 5 main skills you need to become a successful CFO of a listed company:

Financial management and reporting

• Why: To manage a company, your first tool to steer financial performance is your financial management reporting systems. It’s key to report the public financial information to your stakeholders.
• How to Acquire: You can acquire this skill through education and experience in finance, accounting, and business. An MBA or CPA certification can be helpful.
• Example: A CFO of a listed company has to prepare and present financial statements to the board and shareholders during quarterly earnings calls.

Strategy development and execution

• Why: As a CFO of a listed company, it is important to have the ability to develop and execute strategic plans to achieve the company’s goals and meet the expectations of stakeholders.
• How to develop this skills: be involved in strategic projects as soon as you can. You will learn how to define a strategic project and how to link it to the overall strategy of the company.
  The next step will be to get experience in planning strategic project and executing them. In this step you will work on financial models and business cases.
  The last step will be to be part of the team managing the whole strategic planning process of a company. In this last part, you will build the whole planning and present it to the board.
• Example: As a CFO of a listed company, you will need to work with the CEO and other executives to develop a long-term strategic plan and ensure its implementation to drive the company’s growth.

Risk management

• Why: As a CFO of a listed company, it is important to have the ability to identify, assess, and manage risks to the company’s financial stability and performance.
• How to acquire these qualities: they can be acquired through education in finance and risk management, experience in risk assessments and analysis, and exposure to different industries and business models.
• Example: A CFO of a listed company has to perform regular risk assessments and develop contingency plans to mitigate potential financial impacts to the company.

Investor relations

• Why: As a CFO of a listed company, it is important to have strong communication skills to effectively engage with investors and address their concerns. But also understand the regulations concerning listed companies as well as the stock market dynamics.
• How to acquire these skills: You can acquire it through an experience in investor relations and exposure to the investment community.
• Example: A CFO of a listed company will meet regularly with investors and participate in earnings calls. In this call he will have to provide financial updates and address investor concerns.

Stakeholder management

• Why: As a CFO of a listed company, it is important to have the ability to effectively communicate and manage relationships with stakeholders such as shareholders, employees, customers, and suppliers.
• How to be great at these skills : through experience in different cross-departmental projects. You can also take specific soft-skills workshops focusing on developing your ability to understand the different traits of character you can deal with in a company. In this workshops you would also learn how to influence and communicate with different types of personality.
• Example: A CFO of a listed company has to communicate the company’s financial performance and strategy to employees and participate in stakeholder engagement activities to build and maintain positive relationships.

Become A Successful CFO of A Division

His/her role is to drive the performance of the business and make sure you apply the group strategy.

If you want to become a great CFO for a division of a multinational company, here are the main strengths to demonstrate:

Business acumen

• Why: A CFO of a division should have a strong understanding of the company’s products, services, and operations to drive performance and align with the overall company strategy.
• How to acquire it: you can acquire it through experience in the company’s industry, hands-on experience in various functions, and education in business and management. The best way to learn business acumen is to spend time in operational roles either as a controller or an FP&A analyst for a manufacturing unit or dedicated to a department.
• Example: A CFO of a division needs to analyze sales data and market trends to make recommendations for improving business performance.

Knowledge of company’s products and services

• Why: As a CFO, it is important to have a deep understanding of the company’s products and services to make informed financial decisions and effectively manage the company’s operations.
• How to develop this skills: First, you need to have a full overview of your products and services portfolio. Get it by having deep discussions with sales and marketing. Then you need to understand the economics of your products and services. Analyse the gross margins of your products by understanding how the price is set up and the composition of the standard price. Finally, participate in strategic discussions around product roadmap and development.
• Example: A CFO could work with the company’s product development team to assess the financial viability of new product offerings. The CFO will also have to review investment decisions for product improvement and innovation. Finally, he is responsible to ensure that the company’s product and service offerings are aligned with the company’s overall strategy and goals.

Business Performance Management:

• Why: As a CFO of a division, it is important to have the ability to effectively manage and improve the performance of the division’s operations. This is how the group will judge your success.
• How to get great at Business Performance Management: you will need first to learn how to track performance by setting up the right indicators. Getting experience in FP&A will give you a great understanding of how to compute and follow indicators. Then you will need to learn how to manage performance. This is the most difficult part and where you will have to demonstrate leadership skills. Start by joining a performance management project as active participant. For example, as an analyst you could track specific indicators. Then you could take meetings notes. And finally you could follow up with the different stakeholders when preparing the next follow up meeting. Observe how the leader of the performance management project acts and influence stakeholders to get results. Learn for yourself what works, what does not work and understand the lessons learned of the project to build your own experience.
• Example: A CFO of a division will need to work with the division’s management team to set performance targets, monitor progress, and implement improvements to drive the division’s success. It could be a cost reduction plan with a bi-weekly meeting where the project team analyses item by item how to reduce costs and follows up the implementation of the action plan.

Understanding of group’s processes and controls

• Why: As a CFO of a division, you will be the first point of contact of your group in charge of implementing the group’s processes and controls. Therefore, it’s important to have a deep understanding of group processes and internal controls to ensure financial stability, compliance with laws and regulations, and the accuracy and integrity of financial reporting.
• How do you acquire this understanding? Through experience in different units of the group in finance departments or in the internal audit department. You can also acquire it by participating to a large transformation like ERP implementation or Finance reorganisation.
• Example: A CFO may have to work with the group’s finance and accounting teams to implement and maintain internal controls and financial processes locally and regularly assess the effectiveness of these controls. Additionally, the CFO may be responsible for ensuring the accuracy and integrity of financial reports, which requires a strong understanding of group processes and internal controls.

CFO of A Medium Size Company

The tasks are more diverse within finance (accounting, tax, treasury, compliance, analysis, M&A), and the role can sometimes be extended to an additional function like operations or human resources.

If your focus is to become the CFO of a medium size company, you will want to focus on the following skills:

Financial management and reporting

• Why: To become a successful CFO of a medium-sized business it is important to have a deep understanding of financial management and reporting to effectively manage the company’s financial resources, make informed financial decisions, and provide accurate and timely financial information to stakeholders.
• How to acquire this skill: This skill can be acquired experience in different finance departments: accounting, reporting and FP&A. It’s important that you get exposure to different financial systems and reporting processes. For external reporting you will need to stay up-to-date with requirement through continuous education in accounting and regulatory updates.
• Example: A CFO of an medium-sized enterprise may be required to work with the company’s finance and accounting teams to develop and implement financial management processes, regularly assess the company’s financial performance, and prepare and deliver accurate and timely financial reports to stakeholders, including shareholders, lenders, and regulatory bodies. The CFO must be able to effectively manage the company’s financial resources, including cash flow, investments, and credit facilities, while ensuring compliance with relevant laws and regulations.

Financial analysis and planning

• Why: The CFO is responsible for providing financial insights and recommendations to support the company’s decision-making.
• How to acquire this skill: You can start in a FP&A department, working on budgeting and forecasting. Get involved in business case calculations but also in presenting the business cases. Learn to associate financial data with non financial data to create insights.
• Example: A CFO of a medium-sized company has to prepare the company’s budget and forecast future financial performance to support strategic planning.

Taxation

• Why: As a CFO, it is important to have a deep understanding of taxation to minimize the company’s tax liability, comply with relevant laws and regulations, and ensure the accuracy of financial reporting related to taxes.
• How can you develop your taxation skills? Don’t wait to become a CFO to learn about tax! Even if it’s not in your scope, discuss with your tax department on the tax implications of some deals and be sure to understand the current hot topics in tax. Then make also sure that you stay informed about the regulatory tax updates of your country.
• Example: You could work with the company’s tax team to develop and implement tax planning strategies, ensure compliance with tax laws and regulations, and prepare and file tax returns.

Treasury

• Why: Treasury management is a critical function for a CFO of a medium-sized company, as it involves managing the company’s financial resources and ensuring that it has sufficient liquidity to meet its obligations.
• How to get treasury skills: get exposure to a range of treasury management challenges and opportunities. A CFO of a medium-sized company must have a strong understanding of financial markets, financial products, and financial risk management practices, as well as the ability to effectively manage the company’s financial resources.
• Example: You could work with the company’s tax team to develop and implement tax planning strategies, ensure compliance with tax laws and regulations, and prepare and file tax returns.

Compliance

• Why: Compliance is an essential aspect of the role of a CFO of a medium-sized company, as it involves ensuring that the company adheres to relevant laws, regulations, and ethical standards.
• How to acquire it: through education in law and regulation, practical experience in compliance, and exposure to a range of compliance-related challenges and opportunities. A CFO of a medium-sized company must have a strong understanding of relevant laws, regulations, and ethical standards, as well as the ability to effectively manage the company’s compliance processes and procedures.
• Example: You could work with the company’s tax team to develop and implement tax planning strategies, ensure compliance with tax laws and regulations, and prepare and file tax returns.

M&A experience

• Why: M&A (Mergers and Acquisitions) is an important aspect of the role of a CFO of a medium-sized company, as it involves identifying and executing opportunities for growth through mergers, acquisitions, or other business combinations.
• How to acquire it: This skill can be developed through education and training in finance, business strategy, and M&A, as well as practical experience in executing M&A transactions. A CFO of a medium-sized company must have a strong understanding of finance and business strategy, as well as the ability to analyze and evaluate potential M&A opportunities, and to manage the financial and operational aspects of M&A transactions.
• Example: A CFO of a medium-sized company may be involved in identifying and executing M&A opportunities to drive growth and expansion. The CFO must be able to analyze and evaluate the financial and operational aspects of potential M&A transactions, such as the financial and operational performance of the target company, the potential benefits and risks of the transaction, and the potential impact on the company’s overall financial position and performance. The CFO must also be able to manage the financial and operational aspects of the M&A transaction, such as due diligence, financing, integration, and post-merger operational management. A strong understanding of M&A enables the CFO of a medium-sized company to play a key role in driving the company’s growth and success.

CFO of A Small Company

His/her role is more hands-on; the CFO of a small company needs to master the doing of many topics as the team is smaller, and there are fewer experts.

Here is what you need to learn if you plan to become a successful CFO of an SME.

Business strategy

• Why: Understanding business strategy is essential to become a successful CFO of a small company. It allows them to align their financial management and reporting activities with the overall goals and objectives of the company.
• How to acquire it: through exposure to a range of strategic business challenges and opportunities. Sit down with your CEO and other executives. Understand the strategy and link it to financials. A CFO of a small company must be able to understand the company’s overall goals and objectives and develop financial management and reporting activities that support those goals.
• Example: A CFO of a small company may need to work closely with the CEO and other members of the leadership team to understand the company’s overall strategy and to develop financial plans and reporting activities that support that strategy. The CFO must be able to provide financial analysis and support for business decisions, and to help the company make informed decisions about growth, investment, and other strategic initiatives. A strong understanding of business strategy allows the CFO of a small company to play a key role in driving the success of the company over the long-term.

Entrepreneurial mindset

• Why: To become a successful CFO of a small company, you should be able to think creatively and outside the box to solve problems and drive growth.
• How to acquire it: through exposure to entrepreneurship, starting a business, or working in an innovative environment.
• Example: A CFO of a small company will be required to develop new and creative ways to secure funding and support the company’s growth.

Problem-solving skills

• Why: As a CFO of a small company, problem-solving skills are essential for identifying and addressing financial and operational issues that arise in a small company environment.
• How to acquire it: Develop it through practical experience and exposure to a range of financial and operational problems and challenges. A CFO of a small company must be able to identify problems, analyze data, and develop solutions that address these problems.
• Example: A successful CFO of a small company identifies and addresses financial issues such as cash flow management, profitability, and cost control. The CFO may also be involved in operational issues such as process improvement, risk management, and compliance. In each of these areas, the CFO must be able to use their problem-solving skills to identify issues, analyze data, and develop solutions that address the problems and help drive the performance of the company. The ability to solve problems quickly and effectively is a critical skill for the CFO of a small company, as it allows them to drive performance, support growth, and ensure success.

Adaptability and versatility

• Why: Adaptability and versatility are critical skills for a CFO of a small company due to the fast-paced and dynamic nature of small businesses.
• How to acquire it: This skill can be developed through exposure to a range of financial and operational challenges, and through a willingness to learn and adapt to new situations. A CFO of a small company must be able to quickly adapt to changing circumstances and be willing to take on new responsibilities as needed.
• Example: A CFO of a small company may need to be able to quickly adapt to changes in the business environment, such as changes in customer demand, changes in the competitive landscape, or changes in the regulatory environment. The CFO must also be able to take on new responsibilities and challenges as the company grows and evolves, such as new financing needs, new operational requirements, or new compliance challenges. A CFO with strong adaptability and versatility skills will be better equipped to succeed in a fast-paced and dynamic small business environment and to help the company grow and succeed over the long-term.

CFO of A Start-Up

The main goal will be to help finance the growth through external shareholders or banks. On the other hand, the operational side of the CFO of a start-up needs to focus on implementing tools and processes which can scale with the growth.

Therefore, if you are targeting to become the CFO of a start-up, you need to be able to master these topics:

Entrepreneurial mindset

• Why: It is important to have an entrepreneurial mindset to understand the unique challenges and opportunities of a growing business and to support the company’s vision and goals.
• How to acquire this mindset: through experience in starting and growing businesses and exposure to different entrepreneurial approaches and success stories.
• Example: A CFO with an entrepreneurial mindset may be required to work closely with the company’s management team and other stakeholders to understand the company’s vision, goals, and unique challenges. However, the CFO must be able to think creatively and outside the box to develop and implement strategies that support the growth and success of the business. Additionally, the CFO must be able to continuously assess the company’s financial performance and risk exposure and make agile and informed decisions to support the company’s growth and sustainability. An entrepreneurial mindset allows the CFO to be a strategic partner to the management team and a key player in the success of the business.

Networking and fundraising skills

• Why: The CFO of a start-up is responsible for securing funding to support the company’s growth and expansion.
• How to acquire these strengths: through experience in fundraising and networking, education in corporate finance and entrepreneurship, and exposure to the investment community.
• Example: A CFO of a start-up will work with potential investors to secure funding for the company’s expansion.

Financial planning and analysis

• Why: To become a successful CFO, it is important to have a deep understanding of financial planning and analysis (FP&A) to provide accurate and relevant financial information, support decision-making, and drive performance.
• How to learn it: through education in finance and accounting, professional experience in financial analysis and planning, and exposure to different FP&A techniques and tools.
• Example: A CFO of a start-up will have to develop and implement FP&A processes, analyze financial data, and provide accurate and relevant financial information to support decision-making. This may involve preparing budgets, forecasts, and performance reports, analyzing financial trends, and providing insights and recommendations to the management team. Additionally, the CFO must be able to effectively communicate financial information to investors.

Strong interpersonal and leadership skills

• Why” As a CFO of a start-up, strong interpersonal and leadership skills are critical for building relationships with key stakeholders, including investors, employees, and customers.
• How to learn it: These skills can be developed through a combination of education in leadership and management, practical experience leading teams, and exposure to different leadership styles and approaches. Start-ups typically have a dynamic and fast-paced environment, and a CFO with strong interpersonal and leadership skills will be better equipped to navigate this environment and lead effectively.
• Example: A CFO of a start-up may need to lead and manage a lean team of finance and accounting professionals and work closely with the company’s management team to drive performance and secure funding from investors. Additionally, the CFO must be able to effectively communicate financial information, risks, and opportunities to stakeholders and to build and maintain positive relationships with investors, employees, and customers. As a result, a CFO with strong interpersonal and leadership skills will be better equipped to lead the company through periods of rapid growth and change and to build a strong and successful finance function that supports the company’s goals.

The Bottom Line – Start Today and Become A Successful CFO!

To sum up, to become a successful CFO has great challenges, but it is a rewarding career path. Therefore, with dedication and hard work, you can become a successful CFO and make a meaningful contribution to your organization.

Finally, if you are interested in moving to FP&A before becoming a CFO, you can join my course and learn from my 14+ years of experience.