In this article, we are going to see what the main responsibilities a Chief Financial Officer (CFO) has. The four great functional roles that usually a CFO has are as follows;
He protects the key assets of the company and provides information about the company to the internal and external customers of the financial function.
He directs the operations of the financial department, so that these are carried out in the most effective and efficient way.
He moves throughout the organization implementing a way of doing things that brings economic value.
He integrates within the management team and contributes the financial perspective on strategic issues of growth, mergers and acquisitions of the capital markets.
These roles are translated into a series of more specific functions, which make up the day-to-day Chief Financial Officer of a company. Let’s see what the most important responsibilities are of the CFO of a company.
Economic Financial Analysis of the Company
Conducting a periodic analysis of both the income statement and balance sheets is an exercise that helps you make financial decisions. From this type of analysis, you will come to know the answers to the questions such as the following;
What is the economic and financial performance of the company?
Do you have a working capital adequate to your operational needs for funds?
Do you have liquidity tensions?
Is your financial liability well-structured according to your assets?
What payment capacity do you have?
How do you compare with the competition and the industry average?
How do the different items evolve and what is their relative weight?
This is the kind of basic analysis that every CFO should undertake to have the same vision as those who finance the company.
The financial management is involved in the elaboration of annual budgetary plans and their subsequent control and follow-up.
The companies have a wide variety of options today, although annual budgets still dominate a large number of companies of a certain size and a better option is the Quarter Rolling Forecasting), in which each quarter is planned to 12-18 months as a way to overcome the dysfunctions caused by the annual planning.
Whichever option is chosen, a minimum of budget planning and a monthly follow-up are necessary tasks to have a roadmap in a highly unstable environment, since the deviations on said route will give the information of great value for making further decisions.