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What Do CFOs Do At Startups?

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Large public organizations may have established the chief financial officer post, but it is becoming more prevalent in middle and small businesses. Recent job listings for full-time CFOs include an emerging air mobility design and production firm with less than 20 workers in Massachusetts and a community hospital with 94 beds in Hawaii.

To what end are these resources being allocated? CEOs at a fork in the road recognize the value of having a skilled financial adviser on their side to help them grow their businesses and their market share. When hiring an in-house CFO or a virtual or fractional CFO, today’s smart firms see the position as an investment rather than an expense.

A global pandemic made the need to have a financial expert at the helm all the more evident. However, we do not think the CFO’s rise is only attributable to the recession. Take a closer look at the responsibilities and skills that finance chiefs need to be successful.

What is a Chief Financial Officer?

An organization’s chief financial officer (CFO) is the highest-ranking financial specialist in the company and is responsible for ensuring its overall financial health.

Building a top-notch finance and accounting team is one of the CFO’s responsibilities. Other responsibilities include:

  • Ensuring that the ratio of income to costs is appropriate for the business.
  • Overseeing the functions of financial planning and analysis.
  • Obtaining financing.
  • Collaborating with the directors of various departments to examine financial data and develop budgets.
  • Certifying the accuracy of reports.
  • Consulting with boards and the CEO on strategy.

What do they do in a company?

In addition to overseeing the organization’s financial operations and being accountable for the finance and accounting professionals who conduct operational responsibilities, the CFO serves as a strategic adviser to the CEO and other C-suite executives. The Winter 2021 Survey from Brainyard reveals how finance and business experts evaluate success elements and how these rankings have evolved.

The CFO is responsible for achieving sales and profit targets and maintaining a steady cash flow. Chiefs of finance also advise department heads across the business, supporting them in optimizing revenues if they serve in a revenue-generating role and limiting costs without jeopardizing customer or employee happiness or the company’s image.

The CFO assists with selecting qualified personnel for the finance team and collaborates with departments to appropriate funds for human capital management. CFOs contextualize complicated data (current, historical, and anticipated financial performance) and assist the CEO in making effective financial choices. Should this new product or service be introduced? Can we afford to bring our supply chain onshore? What are the tax consequences of our workers working remotely?

Bottomline

CFOs lead the finance and accounting staff and have a broad picture of an organization’s financial health, enabling the CEO and peers such as the CMO, COO, and VPs of HR and sales to concentrate on their respective objectives and operational difficulties. While a chief executive or operating officer may have a background in accounting or finance, they often lack the technical expertise and experience that a chief financial officer brings to the table.

The primary responsibilities of the Chief Financial Officer (CFO) can vary widely depending on the size of the company, the startup in which it serves, and whether or not it is a public or private corporation. However, these responsibilities typically cluster into three broad functional areas: the controller, the treasury, and strategy and forecasting.

 

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