Being a business owner will come with an enormous amount of pride and responsibility. There are many things that must be done and at the top of your to-do list is sure to be making money. This makes it critical to choose the right chief financial officer (CFO) that will be in charge of the money operations of your business. This is an important position because this person will present and accurately report on the financial status of your company. Knowing some of the critical things the CFO will do may enable you to choose this person wisely.
Accounting and reporting
One of the main roles of the CFO is ensuring the accounting for the company is done accurately and meets any legal guidelines. Some businesses may require the CFO to do all the accounting and others may only have this person oversee this critical part of the company.
In addition to ensuring all the accounting has been done correctly, the CFO will also be responsible for reporting this information to the business owner. There are also financial reports, such as profit and loss statements and many others, that will indicate the financial stability of the firm.
Management and budgeting
Smaller companies will require the CFO to oversee some tasks when it comes to the managing and budgeting of the enterprise. These are things that are critical for the operation of your business, and some of these tasks are listed below:
- Cash flow – Keeping track of the amount of money that is available and is capable of being used for various business expenses.
- Salaries – Ensuring all of the employees are paid weekly or monthly and keeping track of payroll. The CFO is often responsible for signing paychecks.
- Budgeting – Making a budget that must be followed for the greatest potential of long-term financial success for the business. Being sure to adhere to any budget is frequently critical for making a substantial profit.
- Investments – Choosing the right places to put any money that is made by the company for the maximum return on the investment is frequently the job of the CFO.
Strategy and planning
It's important to invest the right amount of planning into your company to have the success you want it to have. The CFO is typically responsible for creating and implementing a strategic plan that works to increase the profits of your company over time.
This will involve taking a close look at the day-to-day operations of your business and finding ways that will enable your business to be more productive. Creating methods and steps that will allow your employees to perform better and working to reach the right amount of customer growth will require the right amount of planning.
The success of your business may lie in choosing the ideal CFO. You should look for an individual that has extensive training in accounting and finance in order to qualify for this position. Additionally, selecting a person you trust will give you the peace of mind you need.