For decades, the leading and primary role of a company’s Chief Financial Officer (CFO) was to provide functioning, operational, and budgetary support by being a head accountant and bookkeeper. But with globalization rising, technology evolving, and economic uncertainty, the position of the CFO has now become much more than the head of the financial department. Today, the CFO position includes the addition of advanced roles in company strategy and innovation. Hence, their roles and responsibilities are now extended to multiple jobs.
This guide will provide an insight into the CFO’s world and what are their roles and responsibilities.
Who is a Chief Financial Officer (CFO)?
A Chief Financial Officer (CFO) manages all the financial aspects and issues of the company. They help in shaping and building company policy and financial goals. A CFO’s precise job includes tracking cash flow, analysing strengths and weaknesses, planning the finance, and proposing various corrective measures that can improve or increase the bank balance of the company. Most account and tax advisory firms in Melbourne offer CFO service that improves the financial cash flow of the company and ensures they receive accurate financial reports right on time. Some CFOs also go by the designation of CMA (Certified Management Accountant).
How Do They Work?
This C-suite executive reports directly to the company’s Chief Executive Officer (CEO) or president. The role of CFO is considered as one of the most pre-eminent and supreme in a company. They provide a few remarkable inputs in the company’s financial management, revenue structure, and investments. A CFO contributes tremendously towards the overall success of the firm by working with other senior executives. CFOs ensure that whatever upcoming campaigns are launched, it should be financially feasible and manage fund allocation. They also assist the CEO in analysing cost-benefits and funding initiatives.
Roles of a CFO in Businesses
Here are the four most prominent roles of a CFO in a company:
CFOs acts as an operator who operates systematic financial organisations by providing various financial services including financial planning and analysis, tax calculation, treasury management, and other financial operations.
They act as a steward by protecting important company assets, maintaining books correctly, complying with financial regulations, and communicating risk and rewards to board members and investors.
The CFOs are well-versed with planning strategies and also influence the future direction of the company. Apart from being a strategist, they also provide financial leadership and align finances to support business growth.
CFOs act as a catalyst by promoting timely change in the financial aspect of the company. They also facilitate several business improvement initiatives, such as cost reduction, procurement processes, pricing processes, and others.
Responsibilities of A CFO
- CFOs need to talk to the Board of Directors regularly and provide detailed financial information to analysts, investment managers, and regulators. Ultimately, a CFO must know how to communicate effectively with key stakeholders and convince them of their point of view.
- A CFO needs to identify the challenges/issues and integrate businesses effectively to enhance the effectiveness, process, improve quality, and operations.
- One of their biggest responsibilities is to provide sustainable growth to the company.
- The CFOs must be independent thinkers in support of or against the flow for the benefit of the company.
- CFOs need to analyse risk and manage them effectively to protect the company from future threats.
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