Many people have heard the term CFO but aren’t quite sure as to what a CFO really does. CFO stands for “Chief Financial Officer” and this is the individual generally in charge of managing the financial aspects of a company. CFO’s may have degrees in finance, accounting or business management and may even have a MBA which makes their knowledge and services extremely valuable to both small and large businesses. A CFO has a very prominent position within a company and has a lot of input in regards to a company’s strategic planning. CFO’s usually have great leadership skills since he or she will often be managing individuals and even groups. The CFO frequently works closely with the CEO so it’s crucial that their personalities are compatible.
The Chief Financial Officer is in charge of the accounting department and generally manages the CPA and controller. A CFO’s duties might consist of forming a company’s annual budget, putting in place accounting and financial systems, presenting financial reports to upper management, analyzing financial data, building relationships with financing sources such as banks for funding services, identifying of equity for expansion or to provide liquidity for shareholders, assisting with exit planning and giving advice to the Chief Executive Officer.
It is very rare that a business starts out with a CFO on staff. Bookkeeping duties are usually handled by a secretary or administrative clerk in the beginning. Increased revenue for a business will often lead to a complicated financial situation. As a business expands and evolves, there may be financial questions and accounting issues which will require the expertise of a CFO. A CFO can also be of immense help when it comes to issues like IRS tax audits.
The majority of small businesses do not want to spend six figures on a CFO’s salary and will choose to utilize interim CFO services or an outsourced CFO instead. This allows small business owners and entrepreneurs to utilize the skills and services of an experienced financial executive on a part-time or hourly basis without having to shell out a hefty salary. Outsourcing this position to the right individual can really help a business increase it’s bottom line and become more successful.
A great CFO can affect a corporation’s profits and ultimate success in a big way. A good CFO can optimize your cash flow and accelerate your business’ growth. If you are looking to grow and expand your business then you might want to consider utilizing CFO services in order to give your company the upper hand in a competitive business world.
Written by Jacqueline Star