Our clients often ask us, “Do I need a CFO?” Or, “What does a CFO do?” The short answer? A CFO is a financial expert who knows how to tell your company’s story with numbers, and where your company can go next.
CFO’s lead and oversee accounting, finance, payroll, and other operational areas. It’s the CFO’s team – the Controller and Accountants – that handles the day-to-day accounting, closes the books, and produces financial statements. From there, the CFO tells your company’s financial story to internal leadership, Boards of Directors, bankers, and investors.
The CFO primarily looks ahead and directs you toward your financial goals and milestones. But he or she must also understand past financial performance. In looking at past trends and results, opportunities and warnings can be spotted in time to act.
The CFO manages your company’s financial risks. Financial risks are events that could cause you to lose money, or effect cash flow negatively, where you find yourself unable to meet your obligations. Examples of financial risk are taking on too much debt that cannot be repaid. Another is falling behind on accounts receivable collections, causing cash to decrease.
How can a CFO help your business or organization?
A CFO guides your leadership team to define and measure financial strategy and plays a key role in charting your company’s course and helping you make decisions.
Defining strategy starts with creating a roadmap to achieve your goals, such a growth and expansion plans. A CFO can help you think about and pinpoint your Key Performance Indicators, the key metrics that drive your company’s success. Budgets and forecasts can be built, not just for the current year, but for years into the future.
Once the strategy is in place, your monthly financials tell you if you are on track with your goals. The CFO can interpret the numbers to see where you might need to course correct. Timely, accurate financial statements bring clarity around a company’s current profitability, but the CFO goes beyond to help predict and direct the company’s financial future.
Dashboards are tremendously useful in painting a picture of financial health of the company and CFO’s are expert at creating them and helping leadership use and understand them.
A CFO is a problem solver that can help you find smarter ways of working, by leveraging technology and improving processes. As your company grows, manual processes break down and must be replaced with automated ones. Errors in any process cost money. They effect quality and cause delays in delivery of products and services, they increase headcount by bogging down team members and they affect customer service in a negative way. All of these impact your company’s financial performance.
These are just a few ways you can elevate your company by partnering with a CFO. But there are other areas of financial expertise that could benefit your company:
- Strengths and opportunities identification
- What-if scenarios
- Crisis preparation
- Audit planning and leadership
- Business valuations and exit planning
- Capital raises and investor relations
- Mergers and acquisitions
- Financial coaching
At All In One Accounting, we take businesses from financial chaos to business clarity and beyond. Our elite team of Accountants, Controllers and CFOs are ready to help you in these uncertain times. Ready to explore our CFO Services? Book a free consultation with one of our accounting professionals.