Where should your CFO be spending their time?
For CFOs of private companies, many factors shape their priorities, ensuring efforts align with the company’s specific needs and challenges.
The allocation below reflects the typical responsibilities and focus areas, emphasizing cash flow management, compliance, and strategic growth, which are often more critical in private settings compared to public companies.
CFO Time Allocation
| Activity | Time Allocation (%) | Description |
|---|---|---|
| Financial Planning & Analysis | 25-30% | Budgeting, cash flow management, and financial forecasting, aligning financial goals with business growth. |
| Strategic Leadership | 20-25% | Guiding long-term strategic initiatives, capital allocation, and business expansion or restructuring. |
| Financial Reporting & Compliance | 20-25% | Ensuring accurate financial reporting, tax compliance, and managing audits to maintain stakeholder trust. |
| Operational Efficiency | 15-20% | Enhancing internal controls, cost management, and financial processes to support operations. |
| Risk Management | 10-15% | Identifying and mitigating financial risks, managing insurance, and other risk-related activities. |
| Team Management & Development | 5-10% | Leading and developing the finance team, with a focus on talent management and succession planning. |
Factors Influencing a CFO’s Time Allocation:
- Company Size and Complexity: Larger companies focus more on financial planning and risk management, while smaller ones may emphasize operational efficiency.
- Industry: High regulatory industries require more attention to compliance and reporting.
- Growth Stage: Startups or rapidly growing companies need more strategic leadership and capital management.
- Ownership Structure: Family-owned or closely-held businesses might prioritize cash flow and risk management differently than those with external investors.
- Economic Environment: Economic conditions can shift focus toward risk management and financial forecasting.
A seasoned CFO in a private company setting must be adept at determining where their time is most effectively spent. This includes recognizing when specific tasks should be delegated to accounting or finance staff to ensure the team operates efficiently. Regular check-ins with the CEO are crucial to maintaining alignment with the company’s strategic goals, allowing the CFO to adjust priorities as needed.
In contrast, CFOs in publicly traded companies often spend more time on investor relations, regulatory filings, and market communications, driven by the demands of external shareholders and public scrutiny.
References for CFO Time
- Deloitte Insights: The CFO’s Evolving Role
Deloitte provides in-depth analyses on the role of CFOs, especially in private companies, covering topics like financial planning, strategic leadership, and compliance. - McKinsey & Company: CFO Transitions in Private Companies
McKinsey research discusses how CFOs manage their time and responsibilities, emphasizing the importance of risk management, compliance, and cash flow for private companies. - The Wall Street Journal: The Changing Role of the CFO
This publication highlights shifting CFO priorities, particularly for growth-oriented or privately held companies, stressing the balance between strategic leadership and financial reporting. - Ernst & Young (EY): CFO Survey and Analysis Reports
EY conducts regular surveys on CFO priorities, breaking down common time allocations and areas of focus, especially among private companies. - Association for Financial Professionals (AFP): The CFO’s Guide to Leading Change
AFP publishes guidelines and white papers that outline CFO roles, with specific information on cash flow management, risk assessment, and industry factors. - Harvard Business Review: How CFOs Add Value Beyond Financial Management
HBR provides research on how CFOs contribute strategically beyond financial operations, with insights into how priorities shift based on company size, growth stage, and economic conditions.
