What is a CFO?customonecfo
When it comes to running a business, it’s critical that you have a management team in place that can handle all aspects of your operations. In a corporation, there are several key members of the senior staff, but none are quite as valuable as the CFO, or Chief Financial Officer. Even though the CEO is the one in charge, there is a lot of responsibility that falls on the CFO’s shoulders. As such, it’s imperative that you have someone in this position that knows what he or she is doing so that your company can succeed.
What Does a CFO Do?
Simply put, this position handles all of the business’ finances. This includes everything from sales, expenses, payroll, and even taxes. If it has to do with your company’s money, then the CFO is responsible for it.
Overall, four primary responsibilities fall under the CFO’s jurisdiction. Let’s break them down to get a better understanding of how it all comes together.
Balance the Books
Even if you have accountants monitoring your finances, the CFO is the one in charge of it all. He or she is the one that makes sure that everything balances out and that your company is fiscally solvent.
One key distinction that a CFO has compared to an accountant is that he or she has the authority to report any issues to the CEO and make changes if necessary. So, if your business is losing money, a CFO is the one who will work to correct the problem.
No matter what, your business is going to be under the jurisdiction of several government institutions, all of which have their own rules governing what you can do with your money. A CFO is responsible for making sure that your company follows all of these rules and complies will all local and federal regulations. If you are a public business, then this extends to rules governing shareholders as well.
Data Analysis and Sharing
To ensure that your company is moving in the right direction, you have to be able to understand your finances entirely, including things like sales projections and profit and loss statements. A CFO is charged with creating this data and sharing it with the other members of the management team so that everyone is on board and understands the financial limitations of the company.
Again, the difference between a CFO and an accountant or a controller is that he or she has a certain degree of authority over the company’s assets and planning. This means that the CFO works closely with the management team to ensure that the business stays financially solvent. This can include going over budgets, managing payroll, or dealing with lines of credit. It’s up to the CFO to make sure that you can afford everything you do and to make cuts if that isn’t the case.