How critical is it for a CFO to be an Excel expert and why?

A CFO needs to be an expert at understanding what is included and excluded in a report, manipulating scenarios, and using tools to quickly make changes so her or she can act swiftly and share a report or insight without having to hand it back to a manager or bookkeeper and wait for it to come back.

I agree with Wayne that deep expertise is required at any level, and it's a matter of what that expertise entails - it's different for every level.

I would not want to see any CFO who is an expert in Excel unless these skills have been acquired in his or her journey to being a CFO. Any time in Excel spent by a CFO is generally a waste or at best a poor use of his or her time (even in a start-up company).

To answer your question......it is NOT critical. I do however require myself to be knowledgeable enough to know what is happening inside the spreadsheet and at the same time be able to enter my own set of what I call TEST OR CHECK CELLS. I use these test/check cells to check on the accuracy of computations in the spreadsheet that I am reviewing.

The thing about Excel experts is that most who claim to be "experts" are proficient at best. The more you know about the guts of Excel and the VBA that drives it, the more you will realize how much of an expert you are not. I have been the "in-house expert" on Excel at 3 different companies now, one of which owned an IT company, and I would say at best I am 7 or 8 of 10. Ironically, most people I have interviewed would rate themselves 9-10, and would barely crack 5 on my scale. So my first concern is the subjectivity of "Expert".

Your CFO being an "Excel" expert is likely going to have more to do with age, than competency. The 30 somethings coming up the ladder have lived and breathed Excel their whole life. (I am 32 and my first exposure to spreadsheets was in middle school) They are Excel skilled by accident more than by design. They don't know analytic any other way. Wayne hit on the subject pretty well, but I would add your CFO needs to be an Analytic expert, what tool they use, is relatively unimportant.

In my opinion, the CFO needs to be able to analyze on the fly, with and without Excel. Some of the best I have come across do it as well in their heads as I do in Excel. It is a little scary how quickly they can pull out the anomaly in the data after a quick 60 second scan. The CFO doesn't need to be able to do the analytics but they should understand the structure and how the results they are viewing were achieved.

Excel knowledge has little to do with your CFO's age. I'm 66 and have been using spreadsheets to report and analyze business performance since I was 31.

Having a good grasp of Excel is critical for CFOs in my experience. Some quick reasons...

...CFOs often need to do quick analyses, projections, and calculations, and then often change their plans and assumptions based on the results. Excel is the best tool for this, and assigning the task to others can be time-consuming and risky.

...CFOs need to understand the strength and weaknesses of the tool that their staff uses frequently. If they can't, it's like working in an office where the staff speaks in a foreign language.

...Large software vendors urge companies to replace Excel with BI software, which can cost $10,000 per report according to Boris Evelson at Forrester Research. CFOs who don't understand Excel will likely make wrong decisions about this issue.

...I've taught intermediate-level Excel techniques to many management accountants, who use Excel daily and who often are CFOs in training. In my experience, few management accountants are Excel experts.

...CFOs often need to hire Excel experts. But if CFOs lack a good understanding about Excel, they won't be qualified to recognize the absence of Excel expertise among possible candidates.

However, most CEOs--who often know little about Excel--would have a problem identifying a CFO candidate who's an "expert" in Excel. Instead, the best they can do is to find a CFO with a solid understanding about Excel...a level of expertise that is both necessary and sufficient.

A CFO should have good working knowledge of excel to the extent he needs it. He need not be an expert though. A CFO has many more things to do and having more knowledge of excel would not help in those areas.

Back in the day I had a boss could vet results from a complex Excel spreadsheet on his HP 12C calculator. He didn't know Excel on a deep level, but he knew what was possible in Excel. His ability to "sniff test" the numbers was far more valuable to the company than his ability to run Excel itself. This isn't to say that Excel skills aren't valuable to a CFO, but rather to say sometimes other talents can trump spreadsheet knowledge itself.

I think we are all in agreement - excel is just a tool. The important piece is the ability to understand the numbers and derive conclusions. However, a CFO that can only ask questions and not manipulate a data set is limiting. The best CFO's I have worked with know the numbers cold. And they know them because after reviewing all the reports, they come away with additional questions. These questions are addressed through them manipulating the data.

You don't go home on the weekend with a stack of month-end reports; and come back Monday with questions for others to pull and manipulate data. That is inefficient.

I worked as Controller for a company. The CFO had a computer on his desk for show. In fact, the IT group had removed parts to repair other computers.

Pre me, when the CFO would ask for a report the, the staff would tell him that it would take days to complete the report. The reality, most of the reports requested could be done in less than an hour, but the CFO had no knowledge of day to day accounting or excel and did not realize that he was being miss-led.

After i got there and he began getting information in a much shorter period of time, I think he may have realized that for years he was being miss-led and that the accounting staff spent a lot of time playing.

In my humble opinion, the CFO has to have an understanding of excel in order to set reasonable expectation on how long it should take to do the tasks assigned.

I agree with Regis. Probably more importantly is understanding good spreadsheet design, documenting the goals and design of complex spreadsheets within the file, making the results accurate, and most importantly knowing when to NOT use Excel and find a better tool. There are countless stories of Excel errors causing financial statement errors and then restatements.

I work for a CFO who is a former investment banker. Everything we do must be in Excel. He even evaluates people based on how well they know spreadsheet shortcuts and how well they prepare spreadsheets. This is an extreme. I do not recommend this for anyone pursuing a CFO role, Think of your college courses emphasizing developing communication skills as you move up in rank. This means less technical skills, but more "soft" skills.

I think it's extremely important that a CFO be an expert, or at least proficient, in Excel. Honestly, I can't envision how someone in this day and age could get to a CFO level position without having learned Excel along the way.

I use Excel on a regular basis despite the fact that we have a very good ERP system, SAP Business One. In my experience, most ERP systems will only come with a few standard reports. As a result, you must know how to extract the data from the system or have access to someone that does. Larger companies usually have access to an IT department that can create the necessary queries but smaller companies usually have to pay an outside firm for these queries/reports.

All that said, I don't necessarily think that companies should make hiring decisions based upon a person's experience in Excel. Like most software, Excel can be easily learned with the proper classes. I've often hired candidates that didn't necessarily have the skill set needed, but I knew they had the aptitude to learn quickly.

Like it or not, we live in a digital age where technology is practically obsolete as soon as you buy it. You either keep up or you get left behind.

I believe, like many here on this thread, that a CFO is required to analyze and be decisive. The idea behind using excel or any other application for that matter is to make sense out of the unprocessed data or numbers.

Since excel is a widely used medium, it is important for a CFO to know how it works. Being an expert on excel is again subjective. For someone young, like Chris pointed out, who wants to scale up the ladder has to be competitive. For them, being an expert in excel, adds more value compared to their contemporaries. But for someone who has been working as a CFO (50+ yrs of age) for a decent amount of time in a particular company in a specific industry, has already an advantage of understanding the dynamics of the financials of this company due to lengthy exposure. For such a person, being an expert in excel does not change his position to take decisions radically. It surely eases off certain tasks where you might not need your analyst's assistance for operating excel.

My conclusion is that its a subjective matter depending on person and his career level. Nevertheless, if a baseball player is to do a commentary about a baseball match then you are to be sure that more light will be shed on the insights of the game compared to a commentator who follows baseball but has never played. Likewise, a CFO with excel expertise can not only be analytical and decisive but be more creative and accurate while doing so.

If you are hiring a CFO consultant to help you with process efficiency and cost cutting, yes they need to be very handy with Excel since all their analysis will be done in excel. If you are talking about a corporate CFO then the answer is no. Most of them don't manipulate data.