What Does a CFO Do and How To Apply It To Your Own Personal Finances?

Everyone should be their own CFO; this is the moto of my blog, but what does this mean?

I recently wrote a piece for my Medium account on the chief financial officer (CFO) as a wealth creator i.e someone who works to improve the revenue number of a company. The reality is that the CFO of a company does a multitude of roles, and has significant responsibility across the company. Many of the learnings from being a CFO can enhance your personal finances, and improve your income. 

The below is how I approach my company role as a chief financial officer, and how this applies to your individual finances. My key takeaway is that you should keep learning; in my personal finances I love and listen regularly to Freakonomics. I recently purchased Dan Ariely's new book "Small Change" on behaviours around money; this eye opener can really help you understand the influences causing you to spend more. Check it out here

The CFO Role

The chief financial officer (CFO) is responsible for a huge range of company requirements, not just limited to the finances of the company. Each company has a different requirement for the CFO depending on the skill set of the rest of the management team but typically the CFO will look after the:

  • company financials (revenue, expenses and cash);
  • market and business analysis with associated strategies; and
  • optimising the company processes

Revenue Growth

My role as CFO is to help drive revenue in the company (also known as top line); this is the income for the business and is derived through selling products. When we sell several products, we have multiple revenue streams, and depending on the geography, we have have different currencies we receive this money in. 

My job as CFO is to analyse the revenue to understand:

  • which products are selling well, 
  • which geographies are performing,
  • is the pricing correct; what is the market / value exchange
  • what is our foreign exchange risk on products (the movement in exchange rate caused by political, economic, social factors in a country),
  • do we have diversification in our portfolio of products (i.e are we placing too much reliance on one product to sell over another?).

I need to be able to project these revenues in a financial forecast, and inform the associated departments, management team and board of directors on how we intend to hit those figures. 

This is not too dissimilar to personal finances.

Your income / revenue may contain multiple "products" where the sources of income in your life can be;

  • your job
  • interest on savings account (not so much at the moment),
  • income from renting a room in a property you own,
  • investment income from stocks and shares
  • freelance money from work performed at the weekend
  • dividend income

The list is endless on ways to create other income streams (see my post of post on the Top 3 Ways to Make Money on the Side).

I highly suggest you build as many income streams as possible; you become less dependent on your job, and if the economy goes belly up like in 2007, or the price of oil crashes like in 2014, or you just want to get away from your boss, your revenue is not completely destroyed. 

I've also touched upon FX risk; when you go on holiday you have to buy currency of the country you are going to, and sell your home currency. Normally you are charged a banking fee, an FX fee, and dependent on the state of Brexit, your purchasing power may diminish depending on currency strength. Monzo and Revolut cards currently help with reducing this risk and exposure. 

You need to perform financial projections in your own life: what did you earn last year? How are you going to triple it this year? Never take a year on year cut in income unless you are trying a new job, or industry. People get hung up on budgeting (I will spend this amount of money on bills, eating out, children, rent etc); I much prefer forecasting. What money do you intend to earn for the year, where from, and how is that more than last year?

Cost Saving 

As a CFO, you need to keep an eye on the costs of the company. If costs are out of control you can easily bankrupt a company. I regularly make sure:

  • credit card spending is controlled; 
  • suppliers are charging the right amounts;
  • suppliers are vetted; 
  • costs are in line with revenue;
  • employees are paid in line with market amounts; 
  • internal spending budgets are prepped; and
  • spending is prioritised

In your personal finances the same applies.

  • Keep your credit card spending under control
  • Do not spend more than you earn
  • Make sure you are paying the right amount (banks make mistakes on bank statements; check it)

I'm not going to spend a lot of time on costs as I've covered this in my earlier blog posts on Wee Scot. 


Cash, cash, cash; I'm obsessive on the company cash balance. I spend a lot of time in the bank accounts assessing and understanding what our cash is, cash requirements need to be, what cash we have in other currencies, when we are expecting to be paid by customers, and when do we need to pay our suppliers. I understand where we need to head with our cash balance. 

Get to grips with your cash balance in your personal finances; when in the month are you paid? When do you put your savings aside? When are your low and high points in cash? Make sure you know what your fluctuations look like. Cash is King; fact. 

Market analysis

I spend a significant amount of time reviewing what the market we operate in is doing; I am less consumed with where the market is headed as this is merely a guessing game. There are trends in the market which I follow and analyse, but I spend a lot of time looking at the now of the market; are our customers and partnerships doing well and are they investing in areas which requires our product?

Perform your own market analysis for your personal finances. Oil prices are tanking and so stocks are cheap to buy; renewables are on the rise so maybe worth investing in for the future? 

I do not spend a significant amount of time on my companies competitors; I believe this is a bit like "Keeping Up The Jones" in my personal life. The Jones may have been on the latest holiday, have purchased the biggest house, have a beautiful car out front, and may have no money sat in their savings account (remember: items make you poorer). I find studying competitors the same; it doesn't really matter what they have or what they are doing; keep doing what you are doing, and do it well. 

Business analysis

We perform a SWOT analysis regularly over the company. The SWOT analysis details the strengths, weaknesses, opportunities and threats of a company (SWOT); in personal finances, you should understand these things about yourself in the context of money.

Is my strength that I'm good at saving, and my weakness is that I don't understand where to save my money? Note them done and assess how you utilise your strengths and overcome your weaknesses. 


In a company I try to optimise everything; everything should work efficiently and effectively; work flows should be as smooth as possible. I spend a lot of time assessing the company processes; what is currently broken, or what could we make better.

It's the same for personal finances; should you do all your banking work at the weekend, or at a lunch break so you don't spend time at the weekend doing it? Do you have the most efficient process in place to increase your savings?


The above requires a certain skill set, which anyone can learn:

Level headed and non emotional is a fantastic approach to money. I get that that is hard; you open a credit card bill or utility bill and want to cry or you don't get the bonus you were expecting, or your company screws you out of money, or you have a rogue trader who takes your money and runs.

Finding solutions to the above is all about problem solving, and problem solving is best performed when you are calm and level headed. 

Analytical is another skill I employ regularly. I'm constantly analysing trends and market updates; what is going up, and what is going down and what is not in line with the trends. I analyse what is costing us a lot with limited returns, our customer base, and profit margins. 

This should be performed in your life; which area of revenue is producing the most money for you? Are there big costs you weren't expecting? What is your profit margin (income less costs)?

Whether it's sh*t news, or good news, the management team and board of directors need to be constantly informed of our financial position and company health. Communication is core. The CEO needs to be informed and kept abreast of all information. 

For personal finances, if you have a significant other, talk to them about your money situation; money is the number one reason in the US that couples break up. If you need debt help, google debt advisory services. If you need wealth advice, try a financial advisor through Unbiased or Vouchedfor

Finally, and my most important skill is the ability to learn and apply that knowledge. I don't know everything. I am far far far from the finished product. Learning is so fundamentally important in adapting and growing in my role and driving the company forwards. For my role, I follow many prominent CFOs, I have mentors, I listen to podcasts and I have a really supportive group of FDs and CFOs around me.

As mentioned, in my personal life, I love the podcast Freakonomics to learn from; it's phenomenal! Additionally, Dan Ariely's new book "Small Change: Money Mishaps and How to Avoid them" is brilliant for personal finances. You can buy it from Amazon here

In summary, as the motto of the blog goes "Be Your Own CFO". 


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