The Chief Financial Officer (CFO) plays an essential role in a company. It’s the CFOs responsibility to ensure that the company’s finances are utilised properly and report this information to all of the major stakeholders. The business advisory services that a CFO offers to their company are invaluable in terms of keeping everything financially stable as well as growing the business.
To understand the position of CFO better, let’s break it down into two parts: the duties and the role that a CFO needs to fulfill. Keep in mind that there are different options for hiring a CFO. You can hire one in house or hire a fractional CFO from CFOshare to provide all the help you need at an hourly rate and a fraction of the cost.
Duties of a CFO
Reports Finances of the Company
This is one of the main duties that concern the CFO. Collecting financial data and presenting it regularly to the shareholders and the company’s main constituents is one of the major responsibilities that the CFO position has to uphold. Collating this information and reporting it in an accurate and timely manner can influence the direction in which the company will take—whether it’s towards fiscal growth or a downwards spiral will all depend on the decisions made based on these reports.
Manage Company Cash Flow
Every company has various financial goals and milestones within a given fiscal year, and it’s the CFO’s responsibility that these targets are hit using the company’s liquid assets. The team in charge, under the supervision of the CFO, is tasked with balancing the company’s cash flow and accounts to ensure that the finances are kept solvent in the completion of these goals. Any debts, investments, and other liquidity-related issues should also be addressed under the supervision of the CFO.
Ensure Return on Investment with the Company Assets
Assets acquired by the company should inevitably pay themselves off in the long run. The return on investments from these acquisitions helps company increase its own income as well as its overall value. This is also one of the major goals that the CFO has to work towards, and it requires a lot of data analysis and decision making based on the hard numbers received from the fiscal reports.
CFO Roles in a Company
The CFO plays many different roles and can shape the company as a result. Here are three of the sides that we typically see in a CFO.
As a leader of the company, the CFO takes charge of the financial direction of the organization and its employees. Aside from analysing financial data, the CFO has to make decisions according to this information as its financial head. The CFO can also function as a team lead to other employees—someone that’s willing to coach others and bring out their potential for the good of the company.
As someone who has visibility with the company’s books, the CFO has the responsibility of reporting the financial numbers and makes the right decisions of steering the company in the proper direction. The critical thinking skills required of the task enables the CFO to do predictive forecasting that can push the company towards economic success in its endeavours.
The CFO also has the responsibility of being the “face” of the company as part of its senior management team. Stakeholders and upper management will want the truth regarding the company’s financial viability, and it is the CFO’s role to present this information in a diplomatic and accurate manner. It’s important that this information is presented correctly to ensure the company’s future progress.
Despite the multiple roles that the CFO position has to perform, its importance to the company is a major key to its success. The high level of expertise required for such a job can dictate the company’s future, so being CFO is more than just a fancy title—it’s a responsibility that cannot be taken lightly.