How to become a finance director

Building the optimal finance team structure is critical to maximise efficiency and position the function as the trusted partner to the CEO and wider business. It requires creating a step-by-step roadmap, with changes to roles, reporting lines and processes implemented in phases, so business-as-usual work can continue. 

• Building the optimal finance team structure is critical to position the function as trusted partner to the CEO and wider business
• Restructuring your team can help them perform transactional tasks more efficiently and dedicate more time to strategy
• It requires creating a step-by-step roadmap, with changes to roles, reporting lines and processes implemented in phases
• Building a strong structure involves assessing team capabilities and processes to spot skill gaps and pain points
• Team structure can be decentralised, centralised or hybrid, depending on company size, maturity, industry or operations. 

• The director oversees a company’s entire finance function, acting as the CEO’s strategic partner
• The process of how to become a finance director involves gaining 10-15 years of finance experience, progressing from accounting roles to those leading teams and company financial strategy
• The role requires finance and accounting, strategic thinking, leadership and interpersonal skills as well as a strong grasp of the company’s commercial interests and external economic dynamics
• Key challenges of the role include managing complex data, balancing strategy with daily operations, driving cross-functional alignment and managing risk.

What is a finance director?

Sitting under the CFO, a director oversees a company’s entire finance function, with the ultimate responsibility for its financial health, strategy and governance. 

They’re responsible for translating a company’s strategic goals into financial plans and ensuring financial activities adhere to legal and ethical standards.

What does a finance director do?

They work closely with the CEO and board, offering strategic advice to maximise financial performance in line with the company’s broader goals. A director’s core responsibilities include setting long-term financial goals and strategy, monitoring performance, risk management and compliance, and cash flow management. 

Understanding how to become a finance director starts with knowing the technical and soft skills you need to be successful. Let’s look at the key ones. 

Strategic thinking skills

A director needs the ability to formulate and execute a finance strategy that aligns with the company’s broader business goals. This means not only having the technical skills to analyse and interpret vast volumes of financial data, but to look at it from a high level to strategically plan and offer advice to the company’s leadership.

The director needs to step back from day-to-day operations to think about how the company’s finances need to be steered to achieve the company’s broader strategic goals.

Leadership skills

The director leads a team of finance professionals, so it’s crucial they’re expert at organising staff with clearly defined roles and building a high-performance culture via professional development opportunities. This is especially crucial to ensure talented staff are retained and work to their potential.

A director must be effective at delegating responsibilities and establishing efficient ways of working, quickly addressing any challenges within the team. It’s also important for them to be highly capable at interacting with the company’s senior leadership, to gain buy-in from departmental heads and offer strategic support. 

Interpersonal skills

Fostering strong relationships with C-suite leaders, departmental heads and external stakeholders requires a director to have strong people skills. They need to influence decision makers, manage a diverse range of expectations and resolve conflicts.

As many companies work according to a hybrid model or have staff scattered across regions, the director of finance needs to make an effort to be visible, acting as the face of the finance function. To external stakeholders, like investors, banks or auditors, they must project an image of integrity and professionalism. 

Excellent communication skills

While the ability to communicate well is critical for cultivating working relationships, it’s similarly important to effectively translate complex financial concepts and data into clear strategic advice for non-financial executives.

Not only this, they must have the ability to persuasively present advice, particularly when presenting budgets or challenging non-financial executives on expenditure.

Extensive commercial and accounting experience

While soft skills are critical for a director, so too are their technical skills and experience in financial reporting, accounting standards, tax laws, budgeting and financial analysis.

They must have an expert grasp of the commercial drivers of the company, as well as market and industry dynamics, being able to reconcile these with finance operations.

The process of how to become a finance director typically takes 10 to 15 years, during which time you need to develop a range of soft and technical skills. Here’s how you can develop those skills: 

1. Build your leadership skills

Seek finance roles or internal opportunities where you’re required to make decisions under pressure while leading a project or team. Volunteer to take on roles that involve managing cross-functional relationships, like implementing a new budgeting process or upgrading a reporting system. 

Leading such projects will set you up with the skills to manage a small team, where you can further develop the ability to motivate and manage a range of personalities, as well as delegate effectively.

2. Enhance your technical accounting and finance skills

These skills are first instilled via your education, starting with a bachelor's degree in business, accounting or finance. Many directors also have post-graduate qualifications like a Master of Business Administration (MBA) or Master of Applied Finance as well as a Certified Practising Accountant (CPA) or Chartered Accountant (CA) qualification.

Base-level accounting and finance skills can be acquired through tertiary education and enhanced via work experience. More advanced skills that must be learnt to progress your career include: 

• Financial modelling and valuation: Proficiency in building three-statement financial models (income statement, balance sheet and cash flow statement) to project future performance
• Forecasting and budgeting: The ability to perform rolling forecasts, zero-based budgeting and scenario planning
• Management accounting and cost control: Expertise in cost accounting as well as variance and profitability analysis
• Corporate finance and treasury management: An understanding of capital structure, debt management and working capital optimisation
• Technical accounting and compliance: The director is the ultimate authority for complex accounting treatments in areas like revenue recognition, financial instruments and leases. They therefore need proficiency in the Australian Accounting Standards.

3. Develop communication and presentation skills

A director must be able to use storytelling to communicate effectively, rather than simply presenting charts and figures. This means framing financial results and forecasts within the context of the wider business narrative, making them relevant and understandable to non-financial executives.

Becoming proficient at this requires you to shift your communication style from delivering detailed spreadsheets to presenting concise, action-oriented executive summaries. Your presentations need to clearly explain the key drivers of performance and the financial reasoning behind recommendations. 

You must also hone your persuasion skills to negotiate budgets, investment decisions and terms with external parties like lenders and suppliers. This means developing the ability to defend your financial models and proposals, using data to back them up while remaining confident, composed and collaborative.

4. Grow commercial and strategic awareness

You’ll need to gain experience in all areas of a corporation, not just the finance function. Spend time outside of your team to learn about operations, sales, marketing, their challenges and the wider commercial realities of the company.

This can be done by regularly attending sales and operational planning meetings or scheduling regular visits to non-financial departments. For instance, a director at a manufacturing company could spend half a day within the factory observing how it’s run. 

It’s also important to regularly dedicate time to keeping up to speed on the external market and economy. Read the news, trade publications and analyst reports about your industry, competitors and economic trends. 

5. Use modern financial tools and software

Tech skills are critical as a director of finance. This means becoming proficient with spreadsheets, ERP platforms, financial reporting software and business intelligence tools.

Directors are expected to lead digital transformation of the finance function, so you need to be fully aware of how modern software can automate processes, deliver real-time reporting and simplify data analysis.   

6. Strengthen long-term strategic thinking

As a director, raw financial numbers must be seen through the lens of shaping strategy and future financial performance. Instead of viewing financial planning as an annual compliance event, consider a business plan a live document requiring constant review.

As a director, your focus should be on future outcomes rather than past results. You should be able to explain the company’s financial position 12 to 18 months in the future, based on current operational realities and expected market dynamics. 

You need a mindset that’s always preparing for multiple future outcomes, based on your knowledge of the company’s current financial position, risks and challenges. This means becoming expert at performing rolling forecasts, scenario planning and financial plans that align with the company’s long-term vision and goals.

Let’s run through the roles you’ll need to progress through on the finance director career path.

The finance director career path explained in the previous section will see you pick up the soft and technical skills needed to grapple with a number of challenges: 

Managing complex financial and operational data

Directors and their teams often grapple with the challenges of an unintegrated tech stack. Data siloed in different ERP, accounting, CRM and other platforms makes it impossible to gain a single view of financial performance. 

This situation leads to inefficient manual processes, human error, inaccurate insights and delayed decision-making. The finance team needs to pull data from various systems, clean and validate it, taking up a significant amount of their time. 

The director is responsible for implementing a centralised data strategy and establishing company-wide policies to ensure financial data is consistently and accurately captured, defined and reported.

Balancing strategy with day-to-day operations

The director must divide their time between overseeing recurring financial control, reporting and compliance tasks and providing strategic insights and recommendations to the CEO and board. 

They need to advise on capital expenditure, funding decisions, market entry and mergers and acquisitions. At the same time, they’re responsible for cash flow management, overseeing month-end close and signing off on regulatory matters.

In addition to all this, the director needs to manage a team, ensure they’re motivated, rectify any of their challenges and ensure top talent is incentivised to remain.

Driving cross-functional alignment

The director must ensure that the wider business understands the company’s financial goals and metrics. When creating budgets for different departments, they may face resistance. They may have to challenge department heads on their expensive projects or inefficient practices.

This means the director needs to be resilient and steadfast, but at the same time, persuasive and have the people skills to maintain good relationships. They need to explain to department heads the reasoning behind budget decisions and how they’ll help the company’s broader strategy and interests.  

Managing risk, compliance and controls

The company’s regulatory compliance falls upon the director, meaning they need to ensure there are sufficient resources to track changes in tax laws, accounting standards and data protection regulations.

They must constantly monitor the regulatory landscape and implement necessary changes (often under tight deadlines) or face responsibility for hefty penalties.

The director must also create and oversee a robust system of internal controls to prevent fraud, protect assets and ensure reliable reporting. This covers everything from expense policies to IT controls and cybersecurity protection.

Improve cross-department collaboration

It’s important to position finance so it’s seen by the business as a strategic partner, not just a control centre. Make an effort to understand the challenges and opportunities of sales, marketing, HR, IT and other departments.

This could mean directing senior finance staff to spend defined time within key non-financial teams or developing shared financial KPIs with department leaders. 

Strengthen business partnering skills

Becoming a true strategic partner to the CEO and board means shifting focus from asset protection to strategic value creation. Dedicate significant resources to offering predictive insights and recommendations via rolling forecasts and scenario analysis.

Never present numbers without context. Frame financial results and forecasts within the context of a company’s operational and strategic plans. Discussions with the CEO should be framed around ‘where the company is going’ and ‘what financial levers will get us there.’

When discussing risks, make sure to quantify the potential financial impact on revenue, margin and cash flow. This helps the CEO shift from abstract anxiety to appreciate the potential effect of a risk and therefore make decisions. 

Build and lead high-performing finance teams

To free up time for strategy, master the art of delegating transactional and compliance tasks to the financial controller or financial management software that can automate these tasks. 

Ensure your team is provided with opportunities to develop their skills and experience, whether to pursue professional qualifications (like a CA or CPA certification) or take on new responsibilities or projects that develop financial leadership or strategic skills.

Use storytelling to communicate insights effectively

The key focus when presenting to non-financial executives is to make it understandable and easy to remember. Always explain financial results, forecasts and recommendations within the context of the business narrative.

Think about who you are presenting to. With non-financial executives, try not to overwhelm them with tables and numbers. Use compelling visuals like graphs, charts or simple diagrams in presentations.

Provide succinct explanations that non-financial executives will understand and resonate with, answering three main questions: what happened? Why does it matter to the business’s strategy? What action should we take now?

When presenting key takeaways or recommendations, package them into three key points. This makes them intuitively easier for non-financial executives to understand and remember. 

Here’s how cloud financial management software and business intelligence solutions can solve the challenges of directors and their teams.

Signs it’s time to update your finance systems

If you and your team are forced to perform manual tasks and regularly make errors due to your current tech stack, it may be time to upgrade. Here are the main warning signs:

• Overreliance on spreadsheets: Performing key financial processes like forecasts and reconciliation in spreadsheets results in human error and version control issues
• Inefficient close process: The month-end or quarter-end close takes an inordinate amount of time due to inefficient and manual processes
• Use of workarounds: Your team is regularly forced to export data to a spreadsheet or use unapproved software to complete tasks, resulting in wasted time and errors 
• Poor user experience: Your team is frustrated or there are regular errors due to using a system that’s clunky and not intuitive
• Lack of scalability: Adding a new business unit or product line requires weeks of manual system configuration and spreadsheet building.

The role of business intelligence in decision-making

Business intelligence tools provide directors and their teams the data-driven insights needed to offer forward-looking strategic advice. Here are the key benefits they provide:

• Real-time visibility: Highly visual dashboards provide real-time visibility of financial and operational KPIs, pulling data from ERP, CRM and other platforms 
• Single source of truth: Unifies data from multiple internal platforms into a single system, providing an accurate view of financial performance
• Enhanced data analysis: Makes it easy to run ‘what-if’ scenarios and model multiple financial futures, as well as drill down into what drives profit
• Self-service reporting: Empower non-financial executives to access their own budget and performance data without submitting requests to the finance team.

Software built for directors and CFOs

Access Financials brings together powerful financial management systems in one intuitive, scalable platform. Take our four-minute video tour to see how it can simplify everything from project accounting and expenses, to invoicing, asset management and reporting.