Role of a CFO

Every company, regardless of its size, needs a Chief Financial Officer®

Following is an excerpt of an interview I had with Larry Goldstick of Avenue B FInancial. (Read Entire Interview)

The CFO’s key responsibilities are:

1)      Finance: This is making sure the company NEVER runs out of cash. Cash is the lifeblood of business when it is gone, so is the business. Generating cash requires focus on the balance sheet to assure the company has the right debt structure to support growth, assure accounts receivable balances are current, and inventory levels are properly managed as well as an eye to the income statement to assure operations are profitable.  The CFO must assure proper financing is in place before it is needed to fund growth. So finance is balance sheet and profitability management in order to manage the cash flow and cash position of the company.

2)      Accounting and Financial Control: This is the need for a business to have proper accounting controls, segregation of certain accounting duties and accurate and timely financial statements. A CFO trains and develops staff, evaluates the system of internal control, and puts policies and processes in place that assures financial statements are prepared accurately and timely. The control function assures transactions are properly authorized and accounted for. This function is also responsible for timely and accurate financial reporting to impel operating management toward attainment of company goals and objectives.

3)      Treasury: This is an often overlooked part of the CFO’s role. This is the management and safeguarding of assets. This function includes making sure proper types of insurance are in place and that the limits are properly valued. It also includes investment policies for cash balances, managing accounts receivable collections and other areas related to asset management and the safeguarding of these assets.

4)      Exit Strategy: A business owner needs a comprehensive exit strategy. A comprehensive strategy combines the owner’s goals, current financial position, his readiness to leave the business and the company’s present range of values in order to determine the best course of action to attain the owner’s stated goals.

Proper execution in these areas can help improve cash flow and profitability as well as increase both the intrinsic and extrinsic value drivers of the business, i.e. INCREASE COMPANY VALUE.

I work with companies as a Part Time CFO to help business owners/entrepreneurs take their companies to the next level through improved profitability, improved cash flow and increased company value. Contact me for a no cost or obligation analysis of your business.

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