Chief Financial Officers (CFO's)
The term chief financial officer (CFO) refers to a senior executive responsible for managing the financial actions of a company. The CFO's duties include tracking cash flow and financial planning as well as analyzing the company's financial strengths and weaknesses and proposing corrective actions. The role of a CFO is similar to a treasurer or controller because they are responsible for managing the finance and accounting divisions and for ensuring that the company’s financial reports are accurate and completed in a timely manner.
Quick Tips
A chief financial officer is a top-level executive.
The CFO is a financial controller who handles everything relating to cash flow, financial planning, and taxation issues.
A CFO is often the highest financial position and the third-highest position in a company, playing a vital role in the company's strategic initiatives.
The CFO is responsible for managing the financial activities of a company and adhering to generally accepted accounting principles (GAAP) adopted by the Securities and Exchange Commission (SEC) and other regulatory entities.
CFOs must also adhere to regulations such as the Sarbanes-Oxley Act that include provisions such as fraud prevention and disclosing financial information.
People interested in becoming a CFO must have an academic and professional background in finances, economics, and/or analysis.
People in this role have significant input in the company's investments, capital structure, and how the company manages its income and expenses. This corporate officer may assist the CEO with forecasting, cost-benefit analysis, and obtaining funding for various initiatives.
Key Benefits of Hiring a Fractional CFO:
Improved Financial Information - precise and up-to-date financial reporting and management reports that include forecasts, actual results vs. projections, cash flow projections and other KPIs that improve understanding and promote proactive management. All of which is much more affordable from a fractional standpoint.
Advanced Decision Making - Basing decisions on accurate and up-to-date financial information allows the business owner to avoid making poor or costly decisions. Key decisions include growth strategies, business financing, cost management and staffing.
Stakeholder Trust - Stakeholders usually respond positively to the knowledge that a professional CFO is part of the management team. This takes on additional importance when seeking outside investment, debt financing or positioning a company for sale.
Productivity Enhancement - Hiring a CFO to handle the financial and administrative functions of the business relieves the business owner to focus on running the business.
Questions to ask your client:
From your financial perspective, what are your greatest concerns of the company, and why?
What are the 3–5 key drivers to success in this business that you watch the most? Do you stress-test those drivers, and if so, what do the numbers look like?
How would you describe the company's financial health right now? Why?
Any concerns with the banking relationships? And are we okay from a liquidity standpoint in the short- and mid-term?
“Do we have the funds to keep up with the growth?” (If the company is growing fast)
“Is our business position sound, or competition starting to eat into our sales?” (If the business is not growing fast)
Are there people wearing too many hats? (Think systems and organizational structure)
How sophisticated is the company’s team overall?
Any recent turnover in the company?
Does the company have a dedicated HR person?
Does the company have IT full time?
Does the company complete a hard month-end close?
Does the company reconcile the balance sheet? How frequently?
Does the company have a budget? How do they use it?
Expert Panel - CFO-focused. Link goes here.