The primary role of a CFO is to handle the financial responsibilities of an organization. Although at the end of the day, the CFO reports to the Chief Executive Officer (CEO), they are still in charge of the financial inflow and outflow.
The CFO is part of the senior management of an organization. In smaller organizations, the CFO is usually termed the treasurer. The CFO has to maintain a good working relationship with the rest of the senior management, as communication and leadership skills are required for the role.
Basic responsibilities of a Chief Financial Officer (CFO)
The CFO’s role in an organization is the most important, and the responsibilities vary according to the size of an organization. The CFO approves the inflow and outflow of the finance; for example, if there is an event or a project that needs approval, they will give the go-ahead depending on the financial situation at the moment or according to the available budget. It is up to the CFO to enrich an organization’s financial performance and report the historical and current financial aspects to the CEO and the board members (or trustees).
The reports include not only the incoming and outgoing finances but also the budget and the forecast. As the CFO is in charge of the reporting, the reports have to contain accurate information; the company’s future depends on the company’s financial stability.
As the CFO is in charge of the finances, they should be aware of the country’s economic situation and be apprised of fruitful investments in terms of risk and liquidity. Keeping this in mind, the CFO has to strategically plan the company’s finance to survive in the long run.
There are more responsibilities that a CFO has to undertake other than the roles mentioned above. There are hundreds of startups in every industry, which employ the young generation. This means that all companies in the same industries are in cutthroat competition with each other. The CFO has to look at opportunities that maximize their organization’s financial capacity and implement a cost-benefit analysis to optimize financial stability.
Importance of a CFO
The marketing and creative departments of an organization are essential sectors; however, if the financial aspect isn’t sorted and up to the mark, the organization will be in trouble. The CFO raises funds for the company and keeps track of all the transactions.
The CFO does not perform these tasks singlehandedly in larger organizations but has a team such as accountants or managers who report to the CFO. However, in smaller organizations, the CFO may have to pitch in with the daily workload.
How to become a CFO?
A CFO position requires some skills such as communication, leadership, and interpersonal skills to maintain a good working relationship with their colleagues. They should be trained in finance and accounts. Usually, they start as accountants or auditors and work their way up in an organization, garnering the necessary skills required of them.
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- Chief Information Officer (CIO)
- Chief Marketing Officer (CMO)
- Chief Purchasing Officer (CPO)
- Chief Technology Officer (CTO)
- Chief Sales Officer (CSO)
- Chief Risk Officer (CRO)
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