A chief financial officer, or CFO, has many responsibilities related to the way money is spent, saved and invested. A CFO is an executive that has an important job in keeping business going – if a company’s finances do not check out, the CMO does not have funds for marketing and the CEO does not have a business to lead. But beyond this, a CFO does much more than balancing financial statements.
Chief Financial Officer (CFO)
A CFO has four different roles within their job title, according to Deloitte, and each is unique and challenging. “The two traditional roles are steward, preserving the assets of the organization by minimizing risk and getting the books right, and operator, running a tight finance operation that is efficient and effective. It’s increasingly imported for CFOs to be strategists, helping to shape overall strategy and direction, and catalysts, instilling a financial approach and mindset throughout the organization to help other parts of the business perform better.”
Image source: Deloitte
Essentially, CFOs’ most important job functions include “connecting strategy with performance, avoiding information overload, and protecting information and ensuring accuracy.” While the title ‘CFO’ is often correlated with accounting, numbers and a balance sheet, a CFO has many additional responsibilities.
A vital task for effective CFOs is to look beyond the numbers on financial statements. A CFO needs to be able to understand exactly what these numbers mean for the company, employees and investors, and then be able to explain important aspects to other executives and employees. This means a CFO has superior communication skills. Explaining financials to someone, especially an individual with no accounting or finance background, is no simple task. But CFOs can do so with ease, and make difficult concepts more straightforward to consumers, investors and colleagues. Then, the company uses this information to effectively pitch to investors and sell to consumers.
In addition, a CFO advises about the company’s direction and overall strategy. They must have a good understanding of the company in its entirety and have a sound business background, including operations, development, marketing and finance. They understand their company’s business plan and make suggestions about potential changes and roadblocks.
While nearly any large business or corporation will have a CFO or similar, plus additional financial analysts, a smaller company may not have the resources to hire a CFO. At smaller businesses, a financial strategy can be managed poorly or overlooked by an employee not able to see the big picture when managing a company’s finances.
A CFO is a necessary asset for businesses of all sizes. If yours does not have the funds or means to hire a CFO, consider hiring one part-time. A part-time CFO can sit down with you to explain your company’s direction and give you tips to have a more financially secure business. If you are not sure what your business needs, a CFO can answer any questions about services provided and the direction that you want to take. A part-time CFO can be another well-trained ear to listen and advise as you make big decisions about the future of your business.
