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What Does a CFO Do

What is the main job that the CFO has?

The main responsibility for the chief financial officer (CFO) is to improve the performance of a business’s financials which includes financial reporting, liquidity, as well as the return of investment. This guide will help answer the question “What is the job of a CFO?”

In a business the responsibilities are divided into departments that are typically referred to as the controller’s group, treasury along with finance analyses and planning (FP&A).

What does a CFO do?

We have mentioned above that the role of the CFO can be divided into three broad categories. They are further broken down in details below. In this article, we will try to explain for you “What is the job of a CFO?”.

1. Reporting

Reporting consumes a significant amount of the time of a CFO and the responsibility is usually placed in the Controller’s team. This group of professionals creates all the historical financial reports for employees, shareholders as well as lenders, government agencies, research analysts and other regulatory agencies. This team is accountable for ensuring that all reports are prepared accurately and in a promptly.

2. Liquidity

The CFO has to make sure that the business can keep its financial obligations and control cash flow efficiently. The responsibilities of the CFO are typically handled by the treasury team that is usually less staffed than the report team. The treasury group is responsible for the management of the cash balance of the business and working capital, including the accounts payable and receivable and inventory. They also handle the issuing of debts or investments, as well as manage other decisions related to liquidity.

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3. Return on Investment

The third thing that a CFO is helping the business the highest potential risk-adjusted returns on capital and assets as well as return of capital (or return on equity). That’s where the Financial Planning and Analysis FP&A team is there to assist the CFO determine the future cash flow for the business and then evaluate the actual results against the numbers that were budgeted. This FP&A team plays a crucial part in the analysis and decision making within the company.

If the business includes a development group They also contribute significantly to developing (or trying to generate) the best investment returns for the company.

What Other Tasks Does an CFO Perform?

The above certainly isn’t the sole thing that a CFO is required to do. The above is quite a lot for a CFO and there are many other obligations that involve leadership, communicating between the boards, negotiations with vendors and suppliers, as well as assisting in the pursuit of the vision, mission and values.

Other departments that be under the supervision of the CFO include procurement, supply chain IT, procurement (IT) and nearly every other department, contingent on the structure and skills that is the CFO.