CFOs need six skills to be a leader in Strategic Financial Leadership

The modern CFO has more demands than ever. Here are the skills needed to be a strategic partner that leverages technology and insight to drive growth and plan the future.

Authors are experts in their field and only write about topics where they have experience. Toptal experts who are also in the field review and validate all of our content. View Full Profile

By Puneet Sapra

Verified Expert In Finance

Puneet has been a finance specialist for J.P. Morgan Chase & Co., Pfizer and Harvard Business School. He holds an MBA. He has held CFO positions at public companies, middle-market private-equity-backed companies, and startups.


The traditional responsibilities of a Chief Financial Officer were to monitor cash flow, financial activities, serve as an accounting expert and controller, limit unnecessary expenditures and ensure that financial decisions adhered to standard operating procedure.

The strategic role CFOs play is increasingly important, although these duties remain essential. Modern CFO is required to take on a more broad-minded, growth-oriented role as the pace of business and technology accelerates.

Accenture, a consulting firm, captured this transformation through a survey. It found that finance chiefs spend the majority of their time leading companywide efforts to optimize and transform business operations with an emphasis placed on accelerating revenue growth and profit growth.

This is a new reality I’ve witnessed in fast-growing, small- and medium-sized healthcare firms. I’ve been in a variety of leadership roles. They expect you to be a functional CFO who can deliver on essential accounting responsibilities and a strategic CFO. You will work with the leadership to maximize profits and explore growth opportunities.

How can you develop strategic expertise? Through trial and error, I have learned that the most effective way is to focus on your existing finance capabilities and responsibilities- those functions already within your purview as a CFO- and elevate them to deliver the strategic insight your company needs.

This article will share with you six areas of focus. The skills I will discuss apply to a broad range of companies, including fractional finance officers who work with startups in later stages, interim finance officers employed by distressed companies, or even finance chiefs at public companies.

In order to expand and enhance your current capabilities, I will start with the easiest ones. You’ll probably spend more time on the later topics, such as corporate vision. But I think you will find that they are worth it for you and your business. You’ll see examples of how I use each concept.

  1. Reporting and forecasting

Reporting and forecasting is a must for any finance chief. Software as a Service (SaaS) and cloud-based services have made it cheaper and easier to integrate powerful financial systems throughout an organization. A functional CFO will ensure that all users of these systems are fully trained and using them. While a strategic leader will look for ways to dig deeper into data to uncover actionable insights.

How can I best describe how to develop this? I will share how I showed one company how fully onboarding the team was essential, even for leaders. I was part of a healthcare services startup where the CEO kept track of corporate finances in an Excel spreadsheet that he stored on his desktop. He updated it at night and on weekends. This practice caused apparent problems. His shadow financials are often incomplete. His practice created a disconnect, which prevented the finance department from creating a routine for updating information and providing timely and useful insights to the CEO. The CEO would be blind without this routine when it comes to decisions about profitability and sales.

I was hired by the company to standardize the chart accounts, accounting templates, operational and financial reports. The company and I then decided on a reporting schedule for the finance team to provide the CEO and the board with the latest income statements, balance sheets, Cash Flow statements, and customer and product segmentation. This report provided regular information about the performance of each department, comparing its figures with the budget, forecast and previous-year numbers.

We did not stop there. We used the data to make operational recommendations that would improve financial underperformance. It not only allowed the CEO to spend more time with his family, but it also provided us with strategic insight into company operations.

  1. Financial Planning and Analysis

The next logical step for a strategic CFO is to look for ways to apply standardized databases and quantitative skills in

When I became CFO of a pharmaceutical company, I discovered that very few senior leaders in the company knew which customers, products, or geographies generated the most growth or revenue. When the company needed to increase profits quickly, this became a problem. After implementing reporting improvements, I conducted a comprehensive analysis of profitability across multiple customer and business segments in order to answer more strategic questions.

Using FP&A Business Intelligence Tools like Microsoft Power BI, we identified the main sources of growth, profits, and losses. Then we broke them down into product categories, SKUs, customers, business units, and geographical areas. We didn’t simply produce a report and leave it in the inboxes of our colleagues. We invited cross-functional teams to assist us in designing, developing, and extracting insights from the reports. We also hosted in-depth discussions with executives of each functional area regarding commercial and operational changes which would maximize financial performance.

In a very short time, we had a clear understanding of the segments that contributed to profits. We had complete agreement amongst senior leaders to focus on the most lucrative segments. Using this strategy, we doubled our company’s profit in less than one year.

  1. Risk Management and Mitigation

Finance leaders who thought Risk Management was a mere administrative footnote in financial oversight were shocked by the COVID-19 Pandemic and Breakdowns in Global Supply Chains. Today, CFOs must play a key role in pushing teams to assess risk regularly and address mitigation questions. They must also look at risk management from the perspective of opportunities, identifying where there are potential commercial opportunities.

Leave a Reply

Your email address will not be published. Required fields are marked *