The job of the CFO falls into three fundamental categories, which are broken down in additional element below as we attempt to stipulate for you, “What does a CFO do?”.
1. Reporting
Reporting takes up a number of a CFO’s time, and this responsibility typically resides in the Controller’s group. This workforce of professionals prepares the entire firm’s historical financial reports required for shareholders, employees, lenders, research analysts, governments, and regulatory bodies. This group is responsible for ensuring all reporting is prepared in an accurate and well timed manner.
2. Liquidity
The CFO needs to ensure the company is able to satisfy its financial commitments and handle money flow in probably the most environment friendly way. These responsibilities are usually carried out by the treasury group, which is commonly smaller than the reporting team. This group is tasked with managing the corporate’s money balance and working capital, similar to accounts payable, accounts receivable, and inventory. Additionally they carry out the issuing of any debt, managing investments, and handle other liquidity-related decisions.
3. Return on Funding
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 the place the monetary planning and evaluation – FP&A crew – is available in to help the CFO forecast future money flow of the business after which evaluate actual outcomes to what was budgeted. The FP&A group performs a critical position in analytics and decision making within the business.
If the company has a corporate development group, additionally they play a big part in creating (or trying to create) optimum funding returns for the business.
What Else Does a CFO Do?
Surely the above is just not all a CFO does. Well, the above is actually quite lots 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 company’s mission, vision, values, and culture.
Other groups that might report to the CFO embody provide chain, procurement, info technology (IT), and nearly every other department, depending on the group and the skailing set of the CFO.
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