The job of the CFO falls into three main categories, which are broken down in additional detail under as we try to outline for you, “What does a CFO do?”.
1. Reporting
Reporting takes up a variety of a CFO’s time, and this responsibility typically resides in the Controller’s group. This workforce of professionals prepares the entire company’s historical financial reports required for shareholders, employees, lenders, research analysts, governments, and regulatory bodies. This group is accountable for making certain all reporting is prepared in an accurate and well timed manner.
2. Liquidity
The CFO needs to ensure the corporate is able to satisfy its monetary commitments and handle cash flow in probably the most efficient way. These responsibilities are usually carried out by the treasury group, which is usually smaller than the reporting team. This group is tasked with managing the corporate’s cash balance and working capital, akin to accounts payable, accounts receivable, and inventory. In addition they perform the issuing of any debt, managing investments, and handle different liquidity-related decisions.
3. Return on Funding
The third thing a CFO does is assist earn the company earn the highest possible risk-adjusted return on assets and return on capital (or return on equity). This is the place the monetary planning and evaluation – FP&A staff – is available in to assist the CFO forecast future money flow of the enterprise and then examine precise outcomes to what was budgeted. The FP&A team plays a critical function in analytics and decision making within the business.
If the corporate has a corporate development staff, additionally they play a big part in creating (or attempting to create) optimal funding returns for the business.
What Else Does a CFO Do?
Absolutely the above isn’t all a CFO does. Well, the above is definitely quite rather a lot for a CFO to do, but there are other duties that embrace leadership, communication with the board, negotiating with suppliers and vendors, and supporting the corporate’s mission, vision, values, and culture.
Different groups which may report to the CFO embody provide chain, procurement, information technology (IT), and almost another department, depending on the organization and the skunwell set of the CFO.
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