#14 Strategic CFO Halftime Show

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Becoming a Strategic CFO & Driving Value

Last time, we talked about Closing Q2 & The Checklist. Now it’s time for the halftime show :).

Historically, most of what we’ve written about are tactics to crush typical CFO & finance initiatives.

“What makes a CFO / finance pro valuable?” We’ve asked hundreds of VCs and founders this question as we’ve worked with them. The most common answer: “being strategic.”

Sure, mastering the data & numbers are table stakes for the job. But the faster you can do that (leveraging team, tools (Excel), and technology to get accurate reporting that then drives forecasts), the more strategic you can be.

What do the numbers mean? What are they telling you about the business and where it’s going? What changes can you make today to steer the ship in a slightly different direction that will help win long-term?

Addressing these questions and the resulting insights are used by strategic CFO’s to drive real value at VC funds, traditional funds, and companies of all shapes and sizes.

Becoming Strategic - How To Get There in 7 Steps

Back to the tactics - how does a CFO / finance pro become strategic? Generally, it comes down to tracking down the right data (aka “the source of truth”) and using that to thoughtfully predict the future.

Tactically, how does one get there? Here are the 7 steps we suggest you take:

1. Know the source of truth: what is the actual data that matters? Examples include bank activity (“cash is king”), sales & accounting software outputs, shareholder certificate records, signed legal documents.

2. Clean the data: there’s often “noise” in the numbers (i.e. duplicate transactions, errors). We typically “pull” the data into Excel spreadsheets to modify formatting and present clean data (i.e. what’s relevant). We always have the source data for reference.

3. Build the forecast: now that we have 6 months of data, what do we expect for the rest of the year? Revenue, expenses? What are the “drivers” of those numbers? It’s time to build a clean monthly forecast w/ clean data :).

4. Automate: while you’re building, automate - set up your data feeds and analysis to streamline as many items in steps 1-3 as possible. You’ll be happy you did when you do it all again next month!

5. Anticipate: now that you have historical data and a forecast, anticipate. Where could problems arise (i.e. revenue too low, expenses too high)? What actions can you take today to adjust?

6. Summarize in presentation format - what are the 3-5 bullets that recap your findings? What is the minimum amount of information you can show a colleague without overwhelming them and getting lost in the spreadsheets?

7. Create your playbook: write down every step you took in this process. This is your “playbook.” If you give the playbook to a colleague next month, could they execute all of this without your help? If no, what else do you need to share? (note: perfecting this process may take more than one month :).

Congrats! You’ve now created a process and freed up time to be more strategic next month! Do you have anything else to add? Please reach out and we’ll update our list!

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