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What Does a CFO Do?

 

The job of the CFO falls into three predominant classes, which are broken down in additional detail below as we try to outline for you, "What does a CFO do?".

 

 

 

 

1. Reporting

 

Reporting takes up numerous a CFO’s time, and this responsibility typically resides within the Controller’s group. This crew of professionals prepares all the company’s historical financial reports required for shareholders, staff, lenders, research analysts, governments, and regulatory bodies. This group is answerable for ensuring all reporting is prepared in an accurate and timely manner.

 

 

 

 

2. Liquidity

 

The CFO wants to ensure the corporate is able to fulfill its financial commitments and manage cash flow in the most environment friendly way. These responsibilities are often carried out by the treasury group, which is usually smaller than the reporting team. This group is tasked with managing the company’s cash balance and working capital, resembling accounts payable, accounts receivable, and inventory. They also carry out the issuing of any debt, managing investments, and handle other liquidity-associated decisions.

 

 

 

 

3. Return on Investment

 

The third thing a CFO does is help earn the company earn the highest attainable risk-adjusted return on assets and return on capital (or return on equity). This is where the financial planning and evaluation – FP&A workforce – is available in to assist the CFO forecast future cash flow of the business after which examine precise results to what was budgeted. The FP&A group plays a critical position in analytics and decision making in the business.

 

 

If the corporate has a corporate development crew, additionally they play a big part in creating (or attempting to create) optimal investment returns for the business.

 

 

 

 

What Else Does a CFO Do?

 

Surely the above is not all a CFO does. Well, the above is actually quite rather a lot for a CFO to do, but there are different duties that embody leadership, communication with the board, negotiating with suppliers and vendors, and supporting the corporate’s mission, vision, values, and culture.

 

 

Other groups that may report to the CFO include supply chain, procurement, data technology (IT), and almost any other department, depending on the group and the sksick set of the CFO.

 

 

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