How to be a better CFO – Questions You Need To Answer

The CEO’s job is becoming too complicated. Our leaders need help and I believe the CFO role needs to be redefined to reflect this new complicated world. What do I mean by redefined? I mean the role of the CFO should be to simplify the noise and make sense of the patterns. The CFO is in a perfect position to audit the signals, to really answer the key questions that leaders face day in day out.

I’ve listed below a checklist of questions I’d expect the CEO to ask and the CFO to answer. These questions force and elevate the CFO to think about his or her role. This is a role way beyond the basics: recording transactions, ensuring that financial controls are in place, performing accurate cash flows, maintaining tight AR days, ensuring liquidity ratios are healthy. I’ve tried to keep it non sector specific to add the greatest value.

The Questions

What are the key drivers to drive the profitability of our business?
What products are the most profitable?
What are the ROIs of our marketing campaigns for the last 2 years and reasons behind the result?
What is the cost of acquisition of all sales leads?
What is the cumulative investment by our customers in our products, sorted in descending $ order?
What do our sales look like by sector covering the last 5 years?
What are the main reasons for quarterly Gross Margin movements over the last 12 months?
What are out most successful distribution channels?
How do our volume and yields behind our sales in total and by product area compare over the last 5 years?
What % of our remaining quarterly sales targets are supported by POs and how does that compare with this time last year?
What are the 10 key reasons reconciling last year’s pre tax profit with this years forecast?
How accurate are our weighted pipeline sales forecasts throughout the quarter compared to the final result?
Taking all cost lines as a % of sales, which % have grown the fastest and why?
Which ratios would you use to measure productivity and illustrate your point using 3 years worth of data?
What are the reasons behind our quarterly cash generation numbers covering the last 2 years?
What changes to our pricing model could improve our sales and profits?
What changes to our cost structure could we make to align better to the market demand for our products?
Based on an analysis of our top ten competitors what policies would you change to improve our profitability?
What are our ratios of annual sales to total earnings for all sales professionals for last year?
Where in our business do we potentially leak value and how could we improve a process to change that?
Where are the greatest risks to our planned profit target for this year and what actions could be taken to reduce that risk?