Everybody knows who a CEO is and many have heard of a CFO. Yet there is some mystery around what the role of a CFO is outside of financial actions.
People who deal with B2B transactions often hear, “I’ll have to run that by my CFO” or “If our CFO doesn’t approve this, we won’t proceed.” The CFO holds one of the most important positions in an organization and possesses key knowledge that can make or break it. Their status prevents the business owner or CEO to make strategic business decisions in multiple areas without their consultation.
The financial role of a CFO
The core duties of a CFO include financial planning and tracking cash flow. In addition, they analyze the company’s financial strength. If the company is not doing well, they propose a set of corrective actions to save it from loss.
The strategic role of a CFO
Primarily a CFO is responsible for all financial activity in an organization, but their influence extends far beyond that. They advise the CEO and act as a strategist to them. Using their financial knowledge, they are able to contribute to long-term planning with forecasts and insights from past trends.
The leadership role of a CFO
A CFO must be able to provide leadership to the company alongside other senior executives. Being a top executive, they are party to decisions that have the potential to bring big changes. Taking advantage of their financial background, they can provide valuable insight in the decision-making process.
The mentorship role of a CFO
While most of a CFO’s duties are outside the finance department, they are still quite involved in it. Employees in the department are coached by the CFO and under his or her supervision. The CFO is responsible for getting the best results out of their staff. They do that by working directly with them and looking for ways to increase efficiency in financial processes and functions.