Why is the Chief Financial Officer such a critical hire? The right CFO can truly be your financial optimiser: achieving everything from increasing sales to reducing waste to improving process inefficiencies. Their workflow largely revolves around and within three interconnected core functional areas: sales, operations, accounting.
The value of the CFO in this functional area is in accurately projecting sales revenue, working with the sales team to identify appropriate targets, and giving salespeople the assurance that the products or services they sell will be fulfilled timely and up to the company’s stated quality standards. In other words, CFOs ensure that sales is not selling what the company is unable to sufficiently produce or supply. They also identify areas where sales processes can improve (e.g. long cash conversion cycles) to free up liquidity, increase cash stores for allocation to new uses, and provide salespeople with competitive selling points.
Operations is where the CFO streamlines resource allocations to ensure the production of goods or provision of services runs smoothly. An effective CFO also optimizes allocations to arrange that the right amount of resources is given to a given process at the right time. Such keeps cashflows liquid and agile, reduces production inefficiencies and bottlenecks, and prevents resources from being needlessly unproductive.
CFOs have three core accounting duties. First, they take care of controllership responsibilities. These include making public in a timely manner their company’s financials. This information needs to be accurate, presented in an understandable way, and routine. Company shareholders use such information as the basis for a wide range of financial (and otherwise) decisions. Second, they manage their company’s treasury. This includes investing company money, developing and sustaining an appropriate capital structure, and researching frontier trends to anticipate market changes and/or shocks. Third, CFOs own the economic strategy and financial forecasting processes. This involves everything from identifying inefficiencies and proposing solutions to leveraging efficiencies to drive growth.
If you would like to know more or are looking to hire a CFO, contact me today on email@example.com