Forty days after the end of a year’s first three fiscal quarters, and 60 days after end of the fiscal year, the principal financial officer, or the chief accounting officer, of large US public companies must submit their signature to the company’s financial reports. The US Office of Management and Budget estimates an average of 185.08 burden hours per response for quarterly reports and about 2,300 hours for annual ones. Similar reporting requirements, some of which are more exacting, are in place around the globe.
There’s no doubt reporting is a critical element of an effective finance function, and it’s a skill that every CFO must perfect. But distinctive CFOs don’t solve for accounting, much less quarterly accounting. They solve for long-term value creation. They discern the company’s unique value proposition, which is always relative to peers and potential disruptors. They partner with the CEO and the board to allocate resources toward value-maximizing projects within and across businesses over different time horizons.
CFOs understand their company’s businesses as a complete portfolio and have an informed perspective on how those businesses could be grown, developed, or pared—both organically and by acquisitions, divestitures, and alliances. They are on top of their company’s most important performance indicators and recognize how those can vary among businesses. They are deep in the details of the company’s sources of risk and opportunity—and can communicate all these elements to investors (who are often a highly heterogeneous group).
CFOs do all this and manage the finance function. Doing so demands that they build a practice that is already ahead of the curve on data and analytics; bots have made “bean counting” a thing of the past. CFOs must also provide personal support and inspiration for their immediate and larger teams. They are leaders, regularly the de facto vice CEO, ideally the CEO’s confidante and sounding partner, and often future CEOs themselves. They also have their own learning needs and far-ranging interests that are both professional and personal.
It adds up to a lot more than 185.08 hours per quarter.