Wednesday, February 14, 2018

The top 5 finantial metrics that can create a competitive advantage



Source: https://goo.gl/X5uocn

Regardless of the size of a company, it is empirical that every organization knows and fully understands their current standing, their goals and aspirations, and how to attain these set goals. Financial metrics have traditionally been an indicator of a company´s overall performance. Each finance department is expected to establish and track specific financial goals in an interdepartmental and integrated manner to enable the organization to function effectively.

These financial goals and metrics, often patterned after industry standards, acts as important indicators of a company´s success as it allows organizations to link strategic goals to direct performance and it connects relevant information to important decisions.

Here are the top 5 financial goals and metrics (in no particular order) that can create a competitive advantage for an organization:

Cash Flow

Cash flow represents the cash on hand after deducting investment and working capital increases from the company´s operating cash flow. It is usually used as a measure of a company´s financial health. It is an indicator of how well its resources are being managed and how they are utilized to generate more cash for other investments. This metric is important for companies when forecasting a significant capital expenditure or when following through a specific project.

Asset and Risk management

This metric is all about optimal management of cash, receivables, inventory (aka current assets) as well as management of payables and accruals and the efficient management of its working capital and cash conversion cycle. This is an important metric when a company is evaluating its performance against benchmarked companies.

At the same time, it is also important for a company to manage uncertainties through proper and timely identification, measurement, and control of current risks in terms of corporate governance and regulatory compliance. This metric is important because companies must undertake serious assessments when anticipating greater uncertainty in the business. A process must be in place to assess likelihood of occurrence, its financial impact, and ways of mitigating the cause and effects of the risks identified.

Growth Indices

This metric enables companies to assess and evaluate market share growth, sales growth, and acceptable trade off growth in terms of reductions in cash flows, profit margin, and ROI.

Growth oftentimes depletes cash and reserve borrowing funds such that rigorous asset management is required in order to manage cash flow and to limit borrowing. This metric ensures that companies set growth index goals when growth rates are not as forecasted in comparison to benchmarked companies in the industry.
Profitability ratios

This metric is used to measure operational efficiency. It indicates areas for improvement and the areas that need corrective measures. This metric ensures that companies set profitability ratio goals when they need to operate more effectively and when they want to pursue other improvements within the business.

Tax Optimization

This metric ensures that there is management of tax liability undertaken as an organization conducts business and as an organization tries to reduce the expected taxes. For any company, new acquisitions or projects must be weighed against tax implications and net after tax contribution to the company´s value. A company´s performance must be measured on an after tax basis as much as possible.

Having all these financial metrics fosters a culture of a balanced scorecard as a means to evaluate the performance of the company. It is undeniably an open secret that several strategies fail on execution which is why these metrics will assist companies in implementing and monitoring their strategies by having specific, measurable, realistic, and industry related goals.

Business Visibility

Accurate and real time visibility into the business through an automated financial system is very important in order to track the key performance indicators of a business. It has become very important that every organization has an ability to pull data across the organization and compile it in an intelligent and automated way in order to scale operations quickly and effectively.

Modern technology has now allowed companies to have readily accessible data that can afford them greater predictability and better forecasting of revenues, expenses, cash flow, etc. By benchmarking these metrics, companies can have early warning signals in order to correct certain areas immediately before it affects the financial health of a company. Just as important is the ability to manage non-financial metrics.
e software.

Thursday, February 8, 2018

JN Tiger Construction testimonial

"Thanks for enlighten JN Tiger Construction Inc with your knowledge and expertise. You have helped me move forward with your advice and you have thought me many things that make me work better and be more efficient ... Thanks Soledad Tanner Consulting!"
 
 Javier Orozco
 Founder of JN Tiger Construction Inc.

Tuesday, February 6, 2018

How to escape feelings of inadequacy when it comes to your business

Source:  www.due.com 

Writenn by: Choncé Maddoux




It happens to even the best entrepreneurs. You get a killer business idea or turn a passion into profit and start working for yourself.

You find out that running a business may or may not turn out to be what you thought it would be but it is rewarding after you put in lots of effort and countless hours of work.

Yet and still, it’s easy to feel discouraged and inadequate when you don’t meet certain business goals or if it takes you longer than you anticipated to accomplish something.

Feeling “meh” about your business sometimes is normal seeing as it’s common to run low on steam or compare yourself to someone who seems to be doing better than you but it’s never good to maintain feelings of inadequacy if you truly want to be successful. You have to work to get rid of the downer of these thoughts.

To escape these negative feelings and get back on track, keep these three actionable tips in mind:
Never Compare Your Beginning to Someone Else’s Middle or End Results

One of the main things that you can you feel inadequate about when it comes to your business is when you compare yourself to other people in your niche. There is probably always going to be someone who seems to be doing better than you or they seem like they are working harder than you are.

While you can use the success of others to motivate you and inspire you and get some tips from them to help you — you should never take their actions to heart. You are not them and they are not you.

Comparing is pretty much a waste of time and effort because everyone starts their entrepreneurial journey at different times and has their own unique situations to deal with. If you just started your business a year ago and you’re comparing your success to someone who has been running their business for 4 years, that’s pretty unfair to yourself and a good way to bring on discouragement — and you don’t need that.

The person who has been running their business for several years longer than you has time to make mistakes and learn through trial and error while you may not have had that much time. Remember that you are on your own path and try not to let other people’s timeline affect you.
Get a Coach

Running a business can be lonely at times and you may find that you need lots of support and encouragement for the ups and downs. If you are constantly feeling stuck, you might want to consider hiring a coach or mentor to help you break through and get clearer on your mission or vision.

Having a coach is also great for accountability. For example, if you’ve been meaning to publish a book for years now, your coach or mentor can hold you accountable for that goal so you can actually start making progress on it.

A coach or mentor can also help you identify new strategies to improve your business and personal success, especially if they have already reached the level of success that you wish to obtain.
Focus on One Thing At a Time

If you are feeling like you never get a chance to finish any of your big projects or put enough attention to detail into them, try to slow down and focus on one thing at a time.

It has been studied over and over — Multi-tasking hardly ever works because it pulls your attention in a hundred different directions and can actually slow you down.

If you have big moves to make with your business, map everything out on a calendar and business plan, and focus on each item one-by-one. Once you’ve completed a project and you are pleased with the results, then you can move to the next thing. Remember that you do not have to be 100 percent pleased. It will help move you along more quickly to find the “good enough” ground. Remember, good — and good enough — not perfect. Perfectionists tend to move slower and often discourage themselves into a slump.

This may seem to be a slower way to do things, but it is more effective and will allow you to feel more accomplished in the long run.
Summary: Acknowledge Your Progress and Focus

Feelings of inadequacy often stem from insecurities that may or may not even actually exist. Your first step to overcoming those negative feelings are to take a step back and acknowledge your progress made thus far.

Recognize and celebrate your wins both large and small, then move forward by choosing one or more of the three action-based tips mentioned above.

Remember to stay focused and shy away from letting what others are doing influence how you measure the worth of your business. Focus on your own path.

4 Things You Should Do to Prepare Your Small Business for 2018

Source: www.due.com


With the end of yet another great year it's time to prep ourselves for the next.





With the end of yet another great year it’s time to prep ourselves for the next. Small business owners take this time to evaluate their accomplishments and set the course for what’s ahead.

Every small business has a slightly different end of year checklist. That said there is definitely a common thread that runs throughout. Some of these items may seem obvious but you’d be surprised how many are overlooked. While small they’re still very important and they can make all the difference for accomplishing your goals in 2018.

Here are four small things you can do to prepare your small business for the new year.

1. Organize your books

First and foremost you need to get the logistics out of the way. At the top of your list should be your books. Hopefully you’ve been setting enough money aside each month to pay your taxes. If not, then you’re in trouble. Either way you need to get everything prepared for the good old Uncle Sam.

Make sure you take the time to carefully examine all your financial reports and really take this time to evaluate your progress. If you had trouble getting your books in order then you may make it a goal of yours to keep better track of your finances next year.

One pro tip I can give you is that you may want to consider using an online payments solution with invoicing and expense management functionality. That way you can automate your bookkeeping and focus more on growing your business.

2. Reflect with your team

The end of the year should really be a time for reflection. If you’re like most small business owners the majority of your day is spent in your own head grinding on making your business thrive. Often times this results in the owners missing out on valuable feedback and time spent with their staff.

As things wind down for the holidays make sure you take the time to reflect with your team. Setup one on one chats as well as a group discussion to gather feedback. Make sure every single person has a chance to provide input. This will make for a stronger more engaged team in the long run.

3. Prepare for growth

Growth is typically on the top of the list for every small business owner. However many of them don’t actually take the necessary steps to make that happen. As the year comes to an end this is the time to really set the stage for growth.

Think about where your business is lacking and what efforts produce the biggest return on investment. This also may be the time when you decide to cut a few employees loose. It’s never easy but if you want to be able to move the company forward you need to do what’s necessary.

4. Upgrade your technology

For better or for worse we’re living in the time of constant innovation. Good news is there’s a ton of new technology every single year that can benefit your business. Bad news is that it means you have to replace your old systems with new ones.

If you have the time you should run a quick check to see if you’re up to speed on the latest technologies available. Here are a few tools you may want to checkout before going into the new year:
Slack provides seamless and affordable team communication. I highly recommend this to any startup or team.
Dropbox is great for file-sharing and recently released Dropbox papers which provides a Google Drive style collaboration tool.
Buffer is great for social media marketing as it lets you schedule posts from your social accounts.
Calendar is a fantastic tool for scheduling and managing your time.
Final Thoughts

Out with the old in with the new. With 2018 here it’s time to check those last few items off the list so you can start the new year with a bang. If your a small business owner make sure to do these four small things before wrapping up the year!

(By Renzo Costarella)

Sunday, February 4, 2018

Small Business Taxes: The Virtual Workshop


Welcome to Small Business Taxes: The Virtual Workshop.

We designed this workshop to help you, a new business owner, understand and meet your federal tax obligations. This workshop is constructed so that the first three lessons... What You Need to Know about Federal Taxes and Your New Business, What You Need to Know about Schedule C and Other Small Business Taxes and Tax Forms; And How to File and Pay Your Taxes Electronicallyare for everyone, no matter what kind of business you have or whether you have employees.

Then, in What You Need to Know When You Run Your Business Out of Your Home and How to Set Up a Retirement Plan for You and Your Employees, we'll discuss some information that may be relevant to you now-- or that may become relevant once your business has become established. The final four lessons... What You Need to Know about Federal Taxes when Hiring Employees or Independent Contractors, How to Manage Payroll so You Withhold the Correct Amount from Employees, How to Make Tax Deposits and File a Return to Report Your Payroll Taxes. And Hiring People Who Live in the U.S. but Who Aren't U.S. Citizens, ....are for those employers who already have, or who are thinking about hiring, employees. Because this is a virtual workshop, you can choose the lessons that apply to you.

Using the navigation buttons on the screen, you can go directly to the information you need. You also can pause and bookmark lessons so you can review information at a later time. Best of all, you can return to lessons you didn't need when you started your business but might need now; for example, if you decide to start a retirement plan or your business has grown enough that you want to hire employees-- all the information will be here when you need it. Throughout these lessons, you'll hear from small business owners like yourself, and we hope that by watching these owners learnhow to meet their federal tax obligations, you'll learn how to meet yours as well. Best wishes on your new business.


Self-Employed Individuals Tax Center



Source: https://goo.gl/aHMAbu

Who is Self-Employed?

Generally, you are self-employed if any of the following apply to you.

What are My Self-Employed Tax Obligations?

As a self-employed individual, generally you are required to file an annual return and pay estimated tax quarterly.
Self-employed individuals generally must pay self-employment tax (SE tax) as well as income tax. SE tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. In general, anytime the wording "self-employment tax" is used, it only refers to Social Security and Medicare taxes and not any other tax (like income tax).
Before you can determine if you are subject to self-employment tax and income tax, you must figure your net profit or net loss from your business. You do this by subtracting your business expenses from your business income. If your expenses are less than your income, the difference is net profit and becomes part of your income on page 1 of Form 1040. If your expenses are more than your income, the difference is a net loss. You usually can deduct your loss from gross income on page 1 of Form 1040. But in some situations your loss is limited. See Pub. 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) for more information.
You have to file an income tax return if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Form 1040 instructions (PDF).

How Do I Make My Quarterly Payments?

Estimated tax is the method used to pay Social Security and Medicare taxes and income tax, because you do not have an employer withholding these taxes for you. Form 1040-ES, Estimated Tax for Individuals (PDF), is used to figure these taxes. Form 1040-ES contains a worksheet that is similar to Form 1040. You will need your prior year’s annual tax return in order to fill out Form 1040-ES.
Use the worksheet found in Form 1040-ES, Estimated Tax for Individuals to find out if you are required to file quarterly estimated tax.
Form 1040-ES also contains blank vouchers you can use when you mail your estimated tax payments or you may make your payments using the Electronic Federal Tax Payment System (EFTPS). If this is your first year being self-employed, you will need to estimate the amount of income you expect to earn for the year. If you estimated your earnings too high, simply complete another Form 1040-ES worksheet to refigure your estimated tax for the next quarter. If you estimated your earnings too low, again complete another Form 1040-ES worksheet to recalculate your estimated taxes for the next quarter.
See the Estimated Taxes page for more information. The Self-Employment Tax page has more information on Social Security and Medicare taxes.

How Do I File My Annual Return?

To file your annual tax return, you will need to use Schedule C (PDF) or Schedule C-EZ (PDF) to report your income or loss from a business you operated or a profession you practiced as a sole proprietor. Schedule C Instructions (PDF) may be helpful in filling out this form.
Small businesses and statutory employees with expenses of $5,000 or less may be able to file Schedule C-EZ instead of Schedule C. To find out if you can use Schedule C-EZ, see the instructions in the Schedule C-EZ form.
In order to report your Social Security and Medicare taxes, you must file Schedule SE (Form 1040), Self-Employment Tax (PDF). Use the income or loss calculated on Schedule C or Schedule C-EZ to calculate the amount of Social Security and Medicare taxes you should have paid during the year. The Instructions (PDF) for Schedule SE may be helpful in filing out the form.

Am I Required to File an Information Return?

If you made or received a payment as a small business or self-employed (individual), you are most likely required to file an information return to the IRS.

Business Structures

When beginning a business, you must decide what form of business entity to establish. Your form of business determines which income tax return form you have to file. The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation. A Limited Liability Company (LLC) is a relatively new business structure allowed by state statute. Visit the Business Structures page to learn more about each type of entity and what forms to file.

Home Office Deduction

If you use part of your home for business, you may be able to deduct expenses for the business use of your home. The home office deduction is available for homeowners and renters, and applies to all types of homes.

Married Couples Business - What is a Qualified Joint Venture?

Married Couples Business
The employment tax requirements for family employees may vary from those that apply to other employees. On this page we point out some issues to consider when operating a married couples business.
Election for Married Couples Unincorporated Businesses
For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a "qualified joint venture," whose only members are a married couples filing a joint return, can elect not to be treated as a partnership for Federal tax purposes.

Considering a Tax Professional

Online Learning Tools

The Small Business Taxes: The Virtual Workshop is composed of nine interactive lessons designed to help new small business owners learn their tax rights and responsibilities. The IRS Video Portal contains video and audio presentations on topics of interest to small businesses, individuals and tax professionals.

Thursday, February 1, 2018

Change Management Is Becoming Increasingly Data-Driven. Companies Aren’t Ready


Source: https://goo.gl/4UsCCV


Data science is becoming a reality for change management, and although it may not have arrived yet, it is time for organizations to get ready. The companies best positioned to change in the next decade will be the ones that set themselves up well now, by collecting the right kind of data and investing in their analytics capacity.

The key to building predictive models is knowing what you want to predict and collecting large and diverse data sets that may enable you to do so. Although predictive models for change management are still a ways off, organizations can get themselves on the right path by adopting the right tools and capturing the right data. We see five no-regrets steps that organizations can take:
Start Using Digital Engagement Tools

There is a new generation of real-time employee opinion tools that are starting to replace old-fashioned employee opinion surveys — tools that tell you far more than just what employees think every year. These tools have obvious relevance to change management and can help answer questions like: Is a change being equally well received across locations? Are some managers better than others at delivering messages to employees?

We are working with a large travel and tourism firm to introduce a system for real-time employee feedback. This is giving us the opportunity to experiment with different change strategies within chosen populations in the company. The real-time feedback means we will learn very rapidly how communications or engagement tactics have been received, thus optimizing our actions in days rather than weeks, as might be the case with traditional approaches. This data can then feed into a predictive model, helping us know with precision the actions that are going to accelerate adoption of a new practice, process, or behavior by a given employee group. Commercially available tools, such as culture IQ polls, sample groups of employees through a smartphone app on a daily or weekly basis to generate real-time insights. Waggl.com goes further, creating an ongoing conversation with employees about a change effort, allowing change managers to tie this dialogue to the progress of initiatives they are undertaking. These tools can already have a big impact on change programs, but the data stream they create could be even more important as we learn to build predictive models of change. Deploying them now is critical to ensure success with data-driven change initiatives in the future.
Apply Social Media Analytics to Identify Stakeholder Sentiment

Change managers can also look beyond the confines of the enterprise for insight about the impact of change programs. Customers, channel partners, suppliers, and investors, to name just a few, are all key stakeholders for change programs. They are also more likely than employees to comment on social media about changes a company is making, thus giving potentially vital insight into how they are responding. At EY, where some of us work, we have developed a tool for social media analytics called SMAART that is able to understand sentiment within consumer and influencer groups. In a project for a pharmaceutical company, we were able to isolate the specific information sources that drove positive and negative sentiment toward the client’s brand. We are now starting to apply these techniques to understand the external impact of change efforts, and it’s a simple leap to extend these techniques within the enterprise. Advances in linguistic analysis of text mean we can now capture clues about behavior from people’s word choice; even the use of articles and pronouns can help reveal how someone feels. Applying these tools to anonymized company email or the dialogue on tools like waggl.com will give fresh insight into change readiness and the reactions of employees to different initiatives. And the insights from analyzing internal communication will be stronger when combined with external social media data.
Capture Reference Data About Current Change Projects

Organizations often seem obsessed by measuring fractional shifts in operational performance, capturing data on sales, inventory turns, and manufacturing efficiency. However, when it comes to change, few track performance from project to project beyond knowing which ones met their goals. Although projects have unique features, there are many similarities between process improvement, system change, M&A, and reorganization projects. There are opportunities to capture information about the team involved, the population engaged in the change, how long it took to implement, what tactics were used, and so on. Building a reference data set like this may not yield immediate benefit, but as the overall data set grows, it will make it easier to build accurate predictive models of organizational change.
Use Data to Select People for Change Roles

For decades companies have been using data-driven methods to select candidates for senior roles. And today some businesses such as retailers are using predictive analytics for hiring frontline staff. Applying these tools when building a team could both improve project performance and help to build another new data set. If every change leader and team member underwent psychometric testing and evaluation before the project, this data would become variables to include as you search for a causal model on what leads to successful change projects. This can even be extended to more informal roles like “change agents,” allowing organizations to optimize selection based on what they know about successful personalities for these roles. Along these lines, California startup LEDR Technologies is pioneering techniques to predict team performance. It integrates data sources and uses them to help teams anticipate the challenges they may have with team dynamics, so they can head them off before they occur.
Build a Dashboard

We imagine each organization having a bespoke dashboard, developed in partnership with the firm’s leadership team, reflecting their priorities, competitive position, and future plans. In this way, dashboards can bring insight to specific transformation investments the organization is making. Much of the data that makes up these indicators is already available today but is not being collected. One client of Change Logic’s has built a dashboard for identifying recruitment and attrition in must-win talent populations. It’s not as sophisticated as some of the models we expect to see, but nevertheless it is teaching the executive team to use data to inform people-related decisions.

It will take time to build these sorts of tools. We believe organizations should start building dashboards now and, where possible, automate them. Today, change dashboards are vulnerable to version control issues, human error, and internal politics. Automating the dashboard can make it more transparent and objective.

As organizations collect more data and build more-accurate models, change managers will be able to confidently use them to prescribe strategies to enable organizations to meet their goals. Which stakeholders are involved? What approaches work with groups that share these characteristics? What risks are associated with programs that share these features? What are the techniques that accelerate delivery of business benefit, and what are their relative costs? What is the cause and effect of specific types of investment — for example, leadership development, large group events, and communications cascades? These are all questions that will be answered with data and that will inform customized transformation plans.

Developing these sorts of metrics will not be quick or easy. These are not one-and-done installations, but rather multiyear commitments to capture data, build models, and refine dashboards. Establishing reliable data sets with which to work takes time. Data quality is an issue everywhere; so too is the need for a common data language that allows organizations to know they are measuring what they intend to measure. This has been a problem for data analytics in other fields; there is no reason why change management will be any different.

Although it will take time, we will finally be able to close the causal loop and make reliable predictions for how an action or initiative in a change program will shift a given metric. This will move investment in change from an act of faith to one of data-informed judgment. Change management will move from a project-based discipline struggling to justify adequate investment to one that is advising on business outcomes and how to deliver them. This should lead, at last, to a decline in the one metric about change programs that we all know — failure rate. And along the way we may finally solve the great puzzle of why so many transformation efforts fail.

9 skills CFOs will need to be successful in the future

Written by: James Kosur

Source: https://goo.gl/xrWEpc

The role of the CFO is rapidly changing. A chief financial officer can no longer simply rely on crunching numbers while focusing solely on a company's balance sheet.

To succeed from here on, CFOs will need to shift their focus towards analytics, people management, disruptive technology, and several other crucial and newly forming variables. 

Business Insider sat down with Ash Noah, vice president of CGMA External Relations at the American Institute of CPAs (AICPA). Noah is the former CFO of the international unit of TNT Express, a global transport and logistics provider. In his role, he led finance teams in 45 countries through a significant transformation. Today his team travels all over the world, talking to CFOs and other financial experts about company needs, transformative changes in their industry, and much more. 


Noah painted a picture of what the CFO of the future will look like, and it's a stark contrast from today's financial leaders.


1. CFOs must become analytics wizards.



Credit: Thomas Lohnes / Getty Images

The current role of the CFO is very transactional. However, that is starting to change. Noah says CFOs are quickly becoming more analytical at their core. 

"We should only be spending about 10% of our efforts and time on transactional and 90% of our time on analytics," he says. "Only about 3% of organizations are at the desired state. Most organizations are in the 50/50 range, and most companies are trying to move up that chain. The more time you spend on analytics the more you help the business and enable effective business partnering. The CFO of the future will be a true business partner who will provide these insights."

Noah says there is already a "pull from businesses" as they seek out more analytics data and that CFOs are cognizant of that pull.

2. CFOs must manage an increasing amount of risk.



Credit: Sean Gallup / Getty Images

The level of risk and the rate at which risk is increasing is unprecedented. This calls for highly skilled risk management processes, says Noah.

The "clear and present danger" is that a business model is going to be "disrupted by technology," he says. CFOs are now constantly asking, "Who is going to put me out of business tomorrow?" 

The CFO of the future needs to be beside the CEO, helping to navigate these risks. "Making your business resilient and strengthening your business model is what the CFO of the future will have to do," Noah says.

To underscore his message, he points to the S&P 500. In the 1950s, most companies featured on the list would remain there for 60 years. Clayton Christensen of Harvard University says today's average S&P 500 company will drop off the list in 18 years. Based on those numbers, 75% of the current S&P 500 will not be featured in 2027. 

3. CFOs must adapt to new technology.



Credit: Carl Court / Getty Images

Noah says you must look at your business model and figure out how it can constantly be adapted and how you can finance that evolution. "How you use new metrics to enable innovation is an absolutely essential question for a CFO."

CFOs can no longer rely on old tools and the traditional return on capital, return on investment, payback period, and all the measures that CFOs are so familiar with.

"The old way of thinking stifles innovation and ruins new business creation," Noah says. "The CFO of the future must enable innovation and manage risk better."

4. CFOs must become better at managing people.

Noah says you have to use your technical skills in the context of the business to influence people and to lead change.

"Leadership, people, and business skills are absolutely crucial to the future of the CFO function," Noah explains. "The more you move up, the more you want to make sure you have the right people and leadership skills. Typically finance functions have not paid attention to that in the past."

5. The CFO of the future must guide decisions in a politically charged atmosphere.



Credit: Spencer Platt / Getty Images

The role of a CFO is to represent the organization and fight for the business models of the new world. Noah cites the example of Uber, which has been attacked by government agencies over its contractor-versus-employee structure and its general services. 

"A CFO of the future needs to be at the forefront of providing the business with financial and business implications," he says. "I would stop short of saying a CFO should lobby, but they need to be able to partner with their business in areas such as union regulations and minimum wages laws."

He adds that CFOs need to be able to "measure political impact and show the effects it has in terms of dollars and risk. They also need to enable their partners to lobby and send the right type of messages."

6. CFOs must manage big data as a large part of business operations. 



Credit: Nigel Treblin / Getty Images

Data and analytics are becoming increasingly crucial to businesses, not just in terms of finding new markets and new segments in order to achieve revenue generation, but also for understanding, variabilizing, and controlling costs.

According to Noah, "We did a report on big data a few years ago, and 93% of people surveyed said the way decisions are made in the future will change because of data. We are not expecting CFOs to be data scientists — they don't have to understand the algorithms — but the CFO of the future will need to be the connector between the business and data scientists."

Noah also points out that CFOs in the future will need to be better adept at finding a business' needs and solving problems as they arise. "They are the ones that will translate that to the data scientists," he says. "They are the ones that will help them build the right queries and get the answer the business needs and then be able to take those insights back to the business in order to make them actionable."

7. CFOs will make effective decisions with analytics from outside of the enterprise. 



Credit: Spencer Platt / Getty Images

"CFOs need to develop the right question when creating datasets," Noah says.

He notes that a lot of companies are using big data to drive decisions outside of the enterprise: "Fundamentally it is unstructured; it is outside the boundaries of the enterprise. Right now a lot of the non-financial data is not trusted by owners of that data. However, 74% of companies are saying their gathered information is accurate."

Non-financial data may include machine-versus-human labor and productivity, and how many products were consumed or sold in the marketplace. "To really get insights into a business you have to look at the underlying non-financial drivers to the financial information," he says.

8. CFOs need to understand business drivers and the underlying non-financial information that drives the financials of their company.



Credit: Handout / Getty Images

While analytics outside of the enterprises will become increasingly important, CFOs must also be able to look at the value their company is creating based on variables such as intellectual property and intangible assets. Those non-financial business drivers are becoming increasingly important. 

Noah explains that "when we look at trends, the valuation of a company was traditionally based on 80% of the value created in the balance sheet by tangible items and about 20% of the value was intangible. There was a gap between the market cap of the company and the balance sheet valuation." A study in 2010 found that if you look at S&P 500 valuations today, the gap between the balance sheet and the market valuation has become 80%. That means 80% of the valuation is no longer in the balance sheet.

"If the CFO is focused on the balance sheet and is focused on compliance, focused on processes and procedures and conformance, he's not engaging in value creation," Noah says. "The more significant value is now created from your intangible assets. The CFO of the future really needs to understand and become more of a P&L CFO to engage in value creation."

He adds, "Value creation today is a knowledge-based economy. Companies are now more likely to create value using intangible assets and intellectual property. "

9. Hiring decisions will become a major part of the job for future CFOs.



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CFOs will need to drive talent acquisition and retention. 

"A CFO will need to have a structured approach to create the competencies a company needs, and they will need to fill in the gaps," Noah says. "A CFO must adopt a structured-competencies framework and recruit and train new workers based on that framework."

He also believes the CFO will need to find creative ways to retain workers based on the company's desired competencies.