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Nearly all companies and organizations need highly qualified executive professionals to manage important decisions, and those inquiring about these types of positions may wonder what a CFO does. A CFO, chief financial officer, is the top executive of an organization who manages all topics and decisions surrounding the finance of the company. In large firms, CFOs review reports and financial aspects from many different departments, while in small companies they handle various accounting tasks. While exact job descriptions will vary depending on the organization, described below are common tasks of most CFOs.
Controllership Tasks
A major part of what a CFO does is controllership tasks for the organization. He or she is responsible for accurately presenting and reporting historical financial data for the company. All of the stakeholders of the company, such as employees, shareholders, creditors, and analysts rely on the precise and valuable information. It is essential that the information is both accurate and presented in a timely manner due to various decisions based on that data. A CFO must keep accurate records to effectively analyze data. The CFO supervises financial departments and also acts as the chief financial spokesperson for the company. He or she delegates financial tasks and serves as the financial authority in the company to withhold the integrity of financial information and model accountability. A CFO reports financial information to higher management professionals, such as the chief executive officer (CEO) and the board of directors.
Treasury Duties
According to Investopedia, a CFO is also responsible for an organization’s current financial situation. He or she must make decisions on investments, budgets, and allocation of money. When making these decisions, a CFO must take risk and liquid assets into consideration. Additionally, a CFO manages the company’s capital structure, and determines the ideal balance of internal financing, equity, and debt. A CFO maintains and reports on profit margins and risk mitigation and oversees the daily financial operations and activities. He or she addresses both short and long-term financial needs and manages pay scales and benefits for employees.
Strategic Matters and Predicting Financial Future
The CFO assists chief operating officers and other professionals with all strategic and tactical aspects. He or she is an active participant in shaping the strategies for the company and view things from a big-picture point of view. He or she also plays an important part in the development and assessment of strategic choices. A CFO is a main part of the financial future of an organization. He or she must have the ability to recognize and report the most efficient aspects of the company and how it can capitalize on its strengths. A CFO must use a variety of economic strategies to predict the best way to increase success of the organization in the future. He or she does this by investigating multiple scenarios and figuring out solutions and the best course of action that will benefit the company as a whole. He or she also works to secure new funding for the organization and uses economic policy knowledge to create new marketing strategies to maximize profit.
Related Resource: Earned Value Management
For almost all organizations, management of financial aspects is a major component of effective operation, and highly qualified CFOs are essential employees. Controllership, treasury, and strategic matters and predicting financial future are just a fraction of what a CFO does, these professionals are invaluable assets to all organizations and the key to their success.
