Who is a CFO
The term CFO stands for Chief Financial Officer. The CFO is a senior-level person who is entrusted with the responsibility of overseeing all financial activities of a company or organization. A CFO is a top-notch level of the company, at par with the CEO.
Becoming a CFO requires a lot of experience and relevant qualifications, such as finance and economics degrees and additional certifications.
What Does a CFO Do
As mentioned, CFOs handle all financial affairs of a company and make sure there are no discrepancies or glitches in the process. A CFO does this by:
Providing History of Finances
CFOs take all major stakeholders of the company on board and let them know of all financial transactions that have occurred in the past. It is their job to provide accurate and timely data as all future decisions of the company depend on them.
Providing Current Financial Information
CFOs keep a hawk’s eye on all ongoing financial transactions and regularly update all major stakeholders on them. They update the top-tier management of all ongoing transactions and share their concerns if any. This allows for re-planning or strategizing the future.
Forecasting and Strategizing
Considering all past and present financial flow, CFOs predict the future financial conditions of the company and suggest how they can be made better. They sit and brainstorm, devise strategies as to how the company can generate maximum profits and reduce monetary spending while increasing influx.
Why Employ a CFO
A CFO may be a nice and fancy man. But the question remains, why does a company need a CFO?
1. Tailor the Correct Business Model
For a layperson, a business is a business. We offer services or sell products, maintain a profit, and earn. However, in the real business world, there are outlined ways of running a business, commonly termed a business model. There are several types of business models.
A CFO takes a deep look into a company’s budget, terms of service, operations, strategies, and tentative plans to tailor the best and most effective business model for them. By following this business model, companies have an outer structure, or foundation, upon which they can perform their functions.
2. Make Timely Decisions
With businesses, especially small to medium ones, entrepreneurs make decisions and strategies as the situations occur. There is no financial forecasting, planning, or strategizing. business owners look at their balance sheet, see loss, and then decide to do something about this. While they think something over and implement it, considerable time has elapsed. This time, in the competitive business market, is all a loss for the company.
A CFO can revert all this. They are highly skilled professionals who are experts at financial forecasting. They can sense threats before they attack and make effective strategies. CFOs can devise an effective plan to increase sales and reduce expenses. They are aware of market trends and prepare a business well before time. After all, in the competitive market, a company that plans and acts ahead of time takes the lead.
3. Handle Financial Complexities
There are many types of companies, organizations, and businesses. Some have simple operations while some involve complex monetary dealings as their daily routine. Especially with corporate setups and organizations with numerous sources of funding or dealings, it is always a good idea to have a CFO where there are complex business dealings and financial transactions involved. Not only are CFOs well equipped with the necessary knowledge to handle complicated cash flow, but they also have the expertise to make all of it look like a piece of cake. Only the best skilled CFOs have the uncanny ability to maintain and sustain complex financial issues.
4. Rapid Business Growth
If you are a laid-back company that prefers to go with the flow, you are doing just fine. But if you are a competitive business that is ready to give all it takes to reach the apex of success, you cannot do so without perfectly aligned and streamlined business operations.
The main duties of a CFO involve a keen and detailed analysis of past financial transactions, the study of present monetary health, and future predictions. These main lines of action are the prerequisites for planning future strategies. Effective strategies in turn help a business grow rapidly and attain the heights of success. This applies to businesses that supply both products and services. The ultimate goal is to plan ahead and devise a workable plan that ensures company growth and success.
5. Effective Mergers or Acquisitions
Mergers, acquisitions, or joint ventures are complicated business aspects. Mergers involve merging two businesses. This means understanding the finances of both and then planning how to merge the two in a way that is suitable to both parties. In acquisitions, things are more “serious” as there are assets and equities involved. Joint ventures mean two companies working in collaboration but with separate identities and general operations.
All these business operations have exclusive financial terms and operations. These are beyond the understanding of a layperson and only a CFO can work things out in a way that is understandable by both parties. CFOs devise plans of action in a way such that all financial details are transparent, streamlined, and easy for stakeholders to understand and handle.
Conclusion
In the success-driven world, people now prefer to be an entrepreneur instead of an employee. This means increased market competition, saturation, and other business complexities. In such scenarios, the key that allows some businesses to perform better than others is their effective business strategy, timely planning, financial streamlining, and better services. All these successes are the result of the services provided by a skilled CFO who can take a drowning boat of business to new heights of success.
BS Auditing of Accounts has a large team of the best and most skilled CFOs who have made their metal in their fields. Our team can not only chalk out the best business strategy but provide you with regular and stepwise strategies for business growth.
Feel free to contact us:
• Office # 0641, Tamani Arts Offices, Business Bay, P.O. Box 111390, Dubai, UAE
• +971 4 570 7357
• +971 58 108 5690
