There are three main reasons why finance directors, CFOs, and other top financial and accounting professionals get fired in their organizations. Read below or watch video
One. Management skills.
You need to learn to delegate, communicate, and manage the expectations of your superiors and the stakeholders of your organization.
“Let everybody and God know when you made a mistake”, this was the advice given me by a former City Manager, Lyle Alberg.
I never forgot that advice of this old guy (May he RIP). This helped me throughout my career.
Communicate! Communicate! Communicate! Let your boss know whenever you need help. If you don’t ask for help, that is a form of management incompetence, it will cost you your job.
There are activities that only you as a finance Director or CFO should do and not delegate.
Activities such as maintaining quality of service, innovation in your department, fiscal health of your organization, consistent branding of the message (company line), and the hiring of employees. These activities should never be delegated.
Two. Technical financial accounting skills.
You simply need to know the debits and credits of accounting. You need to know what a balance sheet is, an income statement, a statement of cash flows, a statement of revenues and expenditures and changes in fund balance, a cash flow statement, and other important accounting reports.
You simply cannot delegate the experience and accounting skills in this area to subordinates.
Bank reconciliations: the most important monthly reconciliation that you need to perform in your department or your organization is the bank reconciliation.
If you do not perform a bank reconciliation within 30 days of the end of the prior month when the bank statements were received, you are being incompetent in your job and you will likely lose your job because of this.
Remember that the books are the responsibility of management, not of the auditors.
The auditors are the “last line of defense” for any financial accounting discrepancies.
Too many Finance Directors or CFOs in smaller organizations rely on their independent auditor to find errors or fraud, and they rely on the auditors to their detriment of their career.
Three. Fraud happening on your watch.
It is either a lack of knowledge in maintaining internal controls, segregation of duties, or checks and balances that result in fraud happening on your watch.
If you work hard in your organization to maintain a culture of awareness and freedom to speak up when inappropriate accounting or financial activities are observed, this will help to prevent fraud from happening on your watch.
Please keep in mind the three main reasons why a CFO or Finance Director gets fired or fails at their job.
This is John Herrera from MuniTemps and the CitySpeak blog video and podcast.
Thanks for joining me today.