When a new CFO comes in, it’s almost like a company hitting the financial reset button. The board expects new ideas, sharper focus, and real oversight. But for many new CFOs, the real challenge isn’t just crunching numbers—it’s setting up clear and practical financial policies that everyone can follow.
Strong financial policies aren’t just paperwork. They’re the rules of the road for making, tracking, and spending the company’s money. Good ones help cut down on costly mistakes and keep everyone on the same page, from junior staff up to the board.
What Are Financial Policies, and Why Do They Matter?
When people talk about financial policies, they simply mean the company’s rules on budgeting, spending, investment, and risk. Think of them as the basic playbook for how your business handles its money. Without these, teams can interpret things their own way, which can get messy fast.
Clear, well-written policies make work run smoother. For instance, if everyone understands who signs off on large purchases or how to report expenses, there’s less room for confusion or fraud. They also make audits and compliance checks a whole lot easier.
Taking Stock: Where Is the Company Now?
Every CFO walks into a different situation. Maybe your new company has some policies on file, but they’re stuck in a dusty binder. Or perhaps the business just “does what feels right” without much structure. Either way, it’s smart to start with a close look at the current setup.
This usually means digging into financial statements from the past few years. Are there any areas where cash keeps running low? How good are the monthly projections? If something doesn’t add up, that’s probably where you’ll want to focus your first policies.
Asking long-time staff about what’s working and what isn’t can also save time. Maybe expense approvals take ages, or new hires have no clue how to submit claims. These real-world headaches are golden clues for what needs to change.
Making Budgets and Planning Less Painful
If your budget process is unclear, chaos spreads fast. Start by making spreadsheets that actually match how your teams work—not just what looks good for reporting. Setting simple rules, like who builds the budget and who needs to sign off, beats reinventing the wheel every year.
Financial planning is where the numbers meet the real world. Good forecasts consider not just last year, but trends in sales, seasonal swings, and known big expenses. You’ll want a policy that asks each leader for their best simple guess, and then stress-tests those numbers before they hit the boardroom.
Cash Flow: The Company’s Daily Pulse
People say “cash is king” because it’s true—bad cash flow blindsides companies that look great on paper. So, it’s smart to spell out how often you’ll check cash balances, who tracks supply payments, and which metrics get reviewed at the end of every week.
It also helps to split up your policies on short-term moves (like a rainy-day fund or an overdraft backup) versus longer-term investments or loans. Even simple acts, like listing preferred banks or sign-off rules for new credit, can prevent future headaches.
Risk Management: Preparing for the “What If?”
Every company faces risks, big and small. A good risk management policy just spells out how to spot these risks early—and what to do if something goes wrong.
For example, you might start by making a checklist of common risks: currency swings, bad debts, or even cyber threats. Then, lay out exactly who reviews insurance every year or who signs off on big contracts. Over time, these policies help you sleep a little better at night.
Smart Ideas for Investing and Asset Management
Most CFOs have to decide where to park extra cash or how to manage company assets. This isn’t just about picking the “highest yield.” Your investment policy should spell out what types of investments are allowed, who decides, and what happens if the value tanks.
For asset management, you also need ground rules for buying major equipment, keeping records clear, and deciding when to sell or upgrade assets. Having this all on paper makes audits less painful and keeps the company out of trouble.
Keeping Things Legal and Holding People Accountable
Today, keeping up with regulations is relentless. New reporting rules, tax updates, or anti-fraud steps seem to show up all the time. A solid compliance policy details how often you need to review these changes and who’s in charge of updates.
Accountability means that if someone ignores the rules, there are consequences. Even a simple escalation chart—who to tell when a problem pops up—can keep things from being swept under the rug.
Don’t Forget the Backup Plan
There will always be surprises, like sudden sales drops or supply chain shocks. That’s why you want a basic contingency plan.
Lay out what to cut first or how quickly you’ll freeze new hires if cash runs low. A policy for this helps everyone move faster if things take a turn. It shouldn’t be a secret kept in a desk drawer—share it with the team, so nobody freezes when things go sideways.
Bringing Everyone Along for the Ride
Drafting great financial policies is a team effort. If only a couple of people work on them, they’ll get ignored out in the real world. Instead, involve frontline managers, finance staff, and maybe even company tech leads. They see the problems you’re trying to fix, and their input saves tons of time later.
Don’t just email the new policies out once and hope for the best. Hold quick workshops or Q&As, and ask for feedback. Even the best rules fall flat if nobody understands them. Getting everyone on board changes policies from “just paperwork” to actually useful guides.
Keeping Policies Fresh
The only thing constant is change. A policy that works now might be out of date by this time next year. Set a schedule—maybe every six months or at least annually—to review everything. If your business grows, changes markets, or adds locations, you may need to tweak or overhaul existing rules.
You can use outside perspectives too. Some new CFOs check resources like MackRaph for templates, forums, or to talk with peers facing similar issues. Learning from others, inside and outside your industry, saves energy in the long run.
Where Does This Leave New CFOs?
Stepping into a CFO role is both exciting and overwhelming. You’re not just stewarding the company cash; you’re setting the rules so things don’t spiral later. Rolling out new financial policies can feel thankless at first, but in practice, they help everyone focus on the parts of business that matter.
Lay the groundwork now, get your team talking, and check back on your policies as your company grows. There’s no prize for having the flashiest rules, but the payoff comes the next time there’s a tough call—and your policies have the answer.
For most CFOs, that’s the win that counts. And it means you can actually get back to the “fun stuff”—building a financially healthy business—with a lot less chaos along the way.