Large public corporations may have invented the chief financial officer post, but middle and even small businesses are becoming more often hiring CFOs. Recent full-time CFO job ads on job-search websites include a 94-bed community hospital in Hawaii and an up-and-coming Massachusetts air mobility design and manufacturing firm with less than 20 workers.
In summary, smart companies today see the CFO job as more of an investment than an expenditure, whether internal or available as a virtual or fractional CFO. Contact a Pembroke Pines accountant to know more about the role of a CFO.
Why does a business require a CFO?
A chief financial officer (CFO) is the top-ranking financial professional in an organization and is in charge of the company’s financial well-being. Building an outstanding finance and accounting team is the main CFO’s duties, along with holding revenue and expense balance, supervising FP&A (financial planning and analysis) activities, securing funding, recommending mergers and acquisitions, collaborating with department heads to interpret financial data and design budgets, certifying the veracity of reports, and supplying advice to boards of executives and the CEO on strategy.
Based on their financial insights and domain expertise, CFOs may also suggest changes to supply chains and marketing strategies and help determine the future of technology, particularly fintech.
The best CFOs are visionaries with an eye on the future, collaborate closely with senior leadership, and are not afraid to suggest tactical decisions.
CFO vs. CEO
The top-ranking executive in a company is the chief executive officer (CEO). Counting on the corporate network, the CEO could control every area of a firm’s operational and financial well-being, or a president may divide some duties. The CEO serves as the company’s official spokesperson and encounters the media, the general public, analysts, and, if required, the board of directors.
A company’s liquidity is measured by its capacity to cover its short-term liabilities or those due in less than a year, with readily available, or liquid, cash.
- Return On Investment (ROI)
CFOs strategically focus on ensuring a significant return on investment (ROI) for their organizations. The possibility of getting a return on your investment and the specific quantity of that return is measured by your return on investment, or ROI.
The capacity of CFOs to correctly forecast expected future outcomes is a crucial component of their worth to an organization. This involves financial forecasting and modeling based on internal and external variables that can impact revenue and costs and the company’s historical performance.