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CFO checklist for creating a finance culture

from  November 23, 2021 | 2 min read

Does your organization have a finance culture that helps to drive its performance? If not, this CFO checklist could help you bring about effective change and reap the rewards.

To many employees, talk of a "finance-first culture" might sound like dreary accountancy jargon related to company figures and the share price.

But rather than being an abstract concept, this shift in attitude and behavior makes finance more meaningful and personal to every employee. Put simply, it's the realization of how the contributions and actions of each employee impact the organization’s bottom line, positively and negatively, every day. And this can make a profound difference to performance on an individual and company level.

As the business evolves, finance must evolve

Advancing your people's understanding of their impact on company finances will be critical as pressures mount to drive down cost and increase operational efficiencies.

Making this finance culture change requires a significant shift within the finance department and a big commitment from the CFO — it demands a concerted effort to cement and extend their role as a “business partner” within the business and secure a commitment from other department heads to make a cultural change. This is just one reason why it’s more important than ever to establish a culture for change within your organization so you can react and adapt to an ever-changing business environment.

So when's a good time to start?

When your digital transformation program is getting started or gathering momentum, this is the perfect time to consider your CFO transition checklist when it comes to embracing a finance culture.

Digital transformation brings many benefits. One of the greatest is enabling different departments to work more closely together and understand their contribution to the business.

Creating a finance culture becomes far easier if your transformation includes adopting one of the latest generation of ERPs. By their nature, these centralize data repositories and processes within a single environment. So, not only do people see the financial value of their own role and actions, but this visibility also extends across the company.

Your new finance culture needs to be anchored in facts, so it's essential that your ERP delivers numbers that can be trusted by everyone.

Communicating finance culture

This increased cross-functional working, enabled by a new ERP, helps to support your new finance culture. But you also need to focus on communication and understanding. It’s up to the finance department to help everyone in the business understand how and why their contributions matter.

Good financial culture requires incremental improvement to every part of your operations. In fact, it’s at the level of ops and sales teams that financial culture is at its most powerful. Because of this, for example, the CFO must be involved at every stage of the sales cycle. But how's this achieved?

Three key steps towards creating a finance culture

A CFO checklist can really help at this point, creating a continual process that can evolve and be refined as the business develops. Here are three steps to follow. How many items can you tick off our CFO checklist?

1. Train non-financial managers in basic best practices

Typically, few managers across a business will have a good understanding of how delays in planning, delivery, order-signing, or even simple non-compliance can affect cash flow. But to create a finance culture, that needs to change.

Finance leaders should see themselves as "business partners" as they work with other department leaders to embrace a new finance culture. CFOs must play a role as both coach and facilitator. For example, they can be monitoring performance to alert managers to the effects of their teams’ activities, promoting the significance of cash flow and stressing the importance of the correct technology in achieving business success.

Once they see the significance of their actions, managers are more likely to be motivated to transform their teams' behaviors to eliminate costly errors and start acting in ways that support the bottom line specifically.

2. Communicate financial objectives clearly

Managers across other departments don't need to be hit with a series of balance sheets or income statements. They probably lack the time and interest to delve in deep themselves. Any figures you share must come with a meaningful commentary about their role and how the numbers relate directly to them every day.

Find examples that illustrate in clear and practical terms how decisions impact outcomes. Make sure your counterparts know how they can influence company results in a positive way — and what success looks like. Get this right and your finance culture will start to emerge naturally.                                                           

3. Base incentive systems on financial performance

Embedding a financial culture within any organization means making financial optimization worthwhile for every person in the business. And with clear communication, employees’ new understanding of the company’s financial reality paves the way for creating incentive systems based around that reality.

Bonus policies can be weighted to reflect team cash flow contributions where possible. And company financial performance targets can be made more relevant to everyone. Over time, your new finance culture will simply become your company's culture. For more information about how to achieve this, see our 7 step guide on how to be a good CFO.

CFO checklist summary

1. Train non-financial managers in basic best practices

2. Communicate financial objectives clearly

3. Base incentive systems on financial performance

Think “digital-first” – but pick your tools carefully

Achieving such a wide-ranging finance culture transformation of your organization will only be possible with the right kind of visibility and integration. Achieving these requires a very specific mix of digital tools that complement the actions on your CFO checklist.

One of the most vital tools is an ERP system that centralizes data from all sources and processes information across the whole company within a single environment. This is particularly important when it comes to aligning and integrating financial and operational reporting. After all, you won’t be able to teach your sales teams about the importance of financial culture if your forecasts aren’t well aligned to begin with.

An integrated suite of ERP solutions will give you the means to bring in your new finance culture.

With the right ERP tools, everything can come together:

  • You can integrate finance into operational reporting, creating the bedrock for visibility and smarter decision-making
  • It's possible to improve administrative efficiency and productivity through automation and optimization, so employees have more time to focus on analysis
  • You can adopt tomorrow's technology today, dramatically improving the people experience and taking productivity to the next level

Succeeding beyond your CFO checklist

Finance isn’t just the finance department’s responsibility anymore — every team must play a part in the success of a company. To discover how Unit can help you build a finance culture, download our e-guide, Finance First: Unlocking Innovation.

Frequently asked questions about creating a finance culture

What are the main skills a CFO needs?

  • Leadership – it is vital that a CFO is a good leader, taking responsibility for planning and analysis and building strong fand adaptive finance teams.
  • Communication – a good CFO must be excellent in communication….
  • Reliability – reliability is the foundation of trust for any good leader…
  • Problem solving – perhaps the most crucial skill, the ability to solve problems is…

How do you assess the culture of your department in your organization?

The best way to assess your organizations culture is simply to look at the interactions between your people. Analyzing how your teams are functioning is the first step to understanding how communications and culture can be improved, and how to bridge the gap between finance and the rest of your organization.

What are the best tools for CFOs?

For deep insights that promote better decision-making, adaptive cloud FP&A software will allow CFOs to increase speed and accuracy in planning and empower financial teams. Read more about Unit4’s integrated financial planning software here!

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