Defining the Chief Financial Officer (CFO) & CFO Services
In the many blog posts that our CFO’s have posted at preferredcfo.com, I realized this week that we’ve never addressed the topic of defining the Chief Financial Officer or CFO services. I’m going to lay it out straight and clarify what you should expect if/when you have a CFO. If you engage CFO services, you should expect the CFO to provide these same high-level services.
Chief Financial Officer: What They Do
A chief financial officer (CFO), also known as a chief financial and operating officer by some corporations, stands at the helm of business financial management. The work of a CFO is centered on financial planning to reduce the probability of financial risks.
What do chief financial officers do? The work of CFOs is complex and demanding, constantly balancing priorities and proactive strategies to lay a path for the company.
Three major duties performed by CFOs include:
- Prepare A Company’s Financial Statements & Standings
One of the most visible responsibilities of a CFO is to review, finalize, and present financial statements that reflect the performance of the company. The CFO must determine how a company’s resources are being invested currently and how exposed the company is to risks. This information is used to make useful decisions for the stakeholders of the business, specifically how to finance the business in order to provide the most effective returns on equity.
- Forecast and Outline Economic Strategies
Any CFO will be at least partially responsible for past, present and future financial standings of a company. He should be able to analyze, identify and provide accurate reports of both financial weaknesses and strengths of a company.
CFOs should make realistic assumptions to forecast investment decisions that will bring positive returns for a company while mitigating risks. A CFO should also be in a position to be able to run what-if scenarios of potential strategic options in an effort to provide insight into ways of improving the future financial performance of a company.
- Control Financial Decisions & Assets
When it comes to investments, CFO’s are the eye and ear of the company. They are held accountable for accurate and timely financial reports that contribute to good financial decisions and they are responsible for safeguarding the company’s financial assets. All stakeholders, such as creditors, employees and shareholders, rely on data provided by the chief financial officer.
Does your company benefit from having someone as reliable and strategic as the CFO described above? If not, look more into the CFO services provided by Preferred CFO.
