CFOs at growth and midsize organizations retain their core financial planning and analytical responsibilities as they are increasingly taking on responsibility for a larger number of organization-wide activities. At the core, the CFO is responsible to the company’s owners and management team for all accounting and financial matters. The CFO core functions include managing risk and providing a foundation for success by establishing company-wide objectives, policies, procedures, processes, programs, and practices to assure the company of a continuously sound financial management and reporting structure. This article addresses the key core CFO responsibilities that enable growth and success.
CEOs, owners and management of small to medium-sized businesses know their business and their customer needs very well. However, most businesses in this category have financial management needs that are beyond the knowledge, expertise or the experience of the in-house accounting staff. Most businesses in this category do not need either the large cost or the full time commitment of a permanent CFO. Turning to your CPA firm may help with limited scope matters, however, CPAs lack both the skills and experience that a talented and experienced CFO brings to the company. Companies in this category in general do not understand the benefits of engaging a CFO Consultant. CFO Consultants with the right skills and industry experience bring financial expertise to these companies at a fraction of the cost of a full-time CFO. The ROI to companies that engage a CFO Consultant can be huge.
For many companies, reviewing and managing their financial results is simply an exercise of looking at the P&L and balance sheet after the close of a month. Management then makes a brief determination as to the results usually based on how current month compares with the prior month close, or the same period of the prior year. In essence, the company is informally benchmarking and budgeting against its own actual results. This style of financial management does not take into consideration how the company’s results compare with its industry or competitors, or even with the goals of management and shareholders. Establishing and utilizing benchmarks and budgets to gauge and improve financial results should be a part of every company’s best practices.