The leadership of the company is occupied by various positions, one of which is CFO. Just like a COO (chief operating officer), a CFO is also responsible to the CEO as the highest leader in the company. The position of a CFO may be rarely heard because a CFO tends to work behind a desk. This position is different from the COO, who takes care of the company’s technical affairs, and the CEO, who becomes the face of the company so that the public better knows it. There may be several questions that pop up in your head about CFO, such as what makes CFO different from other leadership positions? And what are the duties and responsibilities of a CFO? In this article, we have provided a brief explanation about CFO duties and roles in the company.
Definition of CFO
The CFO, abbreviated from the chief financial officer, is the head of the company who is responsible for all matters in the financial sector. This includes financial planning, record keeping, to company administration. However, the main task of a CFO is to do financial planning and be responsible for the company’s cash flow.
Not only that, a CFO must also be able to analyze the company’s financial strength so that it can become company policy in the future. In a smaller scope, a CFO can be equated with an organization treasurer. This is because a CFO is closely related to the company’s financial arrangements, even the accounting function that is carried out. A CFO is responsible to the CEO and helps make decisions in the financial sector, with various forecasts and business analyses. Take the example of David McLaughlin as the newest CFO of Blackhawk Market. In this case, David McLaughlin needs to make the financial report of Blackhawk Market to its president. This report includes the company’s financial planning, accounting, internal audit, and so forth. In companies operating in finance, a CFO is at the helm, but a CFO usually occupies the third position in the leadership structure for other industries.
Duties and Authorities of the CFO
Overall, the duties and powers of a CFO like David McLaughlin are numerous. We will outline some of the main points of a CFO’s duties. Those are:
- Supervise the implementation of company finances
A CFO is responsible for providing accurate financial reports to stakeholders. Therefore, he must supervise the implementation of the company’s finances to go according to plan.
- Economic strategy and forecasting
In line with the previous case, a CFO is someone who knows the company’s financial condition. Therefore, a CFO must be able to identify and report on the effectiveness of the company’s strategy. Basically, the duties of a CFO are not limited to the things mentioned above. To some extent, the scope of work for this position is very complex.
The treasury task of a CFO is to determine the company’s financial policies based on the condition of the company. Where the company invests, should it owe or not, to calculate its financial risk is the person’s responsibility in this position.
Apart from that, his primary responsibility is to make sure the company can run as it should. This is supported by a policy based on an analysis by a CFO.
Despite being in the third position in the leadership structure, the CFO still has a vital role in the company. The role of the CFO today is different from his role in the past. In the past, a CFO focused solely on managing company finances.
However, a CFO is required to have creativity and sensitivity to business dynamics at this moment. With the financial data in hand, the CFO is expected to be able to provide input on the company’s business direction. In line with this, there are four roles of a CFO in a company:
- As administrator
The role as administrator for a CFO is in this position, and a CFO must be able to know, record, and maintain all company assets. Maintaining also means ensuring that the assets owned by the company are those that provide results to the company. Therefore, it is necessary to make the right decision if assets are considered less profitable for the company.
- As a strategist
Finance is a vital part of the company. Therefore, the role of the next CFO is to provide the right strategy for the company. Indeed, the strategy formulation is carried out together with the leaders of other companies. However, as a CFO, of course, you must provide data and future analysis to determine the right company strategy.
- As operator
Furthermore, the operator’s role carried out by a CFO is to carry out operational or daily tasks in the financial sector. For example, in doing financial records, forecasting, tax management, and so on.
- As a catalyst
Catalysts, in another sense, can be thought of as the driving force behind something. In this case, the intended catalyst for a CFO is that he must be able to stimulate future business development. This can be done by providing various financial policies to maximize the company’s expenses, maximizing the results.
These four roles prove that the CFO’s role is increasingly considered important and has a more dynamic responsibility for company policies. However, this role will be different for each company, especially depending on the scale of the company.
In addition, there are several must-have abilities to be a chief financial officer. Because it is closely related to the company’s financial function, a CFO must have skills in finance or accounting. In addition, the analytical ability of a CFO also needs to be taken into account. This is so that company policies can be decided appropriately and accordingly.
Another thing that a CFO must have is the ability to lead. Given that the CFO position is a leadership position relying on technical capabilities in finance alone is not enough. This must be supported by his ability to lead the entire staff.