Whether small, mid-sized, or big, every business is built on five essential and simple stages: strategize, invest, innovate, create, and earn. Financial leadership is one of the essential skills needed for cash management for businesses and by focusing on the requirements, CFOs can increase the business’ value; hiring one that has your best interests is a savvy move that is well worth the cost of hire.
Fractionality is not just for the start-up companies; it helps businesses of all sizes strengthen and expand. From raising capital to entering new markets, it offers a wide range of opportunities to a company. If you are ready to take this preeminent role in your boardroom, we have the ultimate guide on how a fractional CFO can help your business reach newer heights. Before moving further, here is a little description of what CFOs are and their roles and responsibilities.
What Is A CFO?
The role and title of the CFO denotes the person who extends their financial expertise and experience on a contractual basis to help businesses. Generally, CFOs are involved in more than one business and are expected to handle a range of similar responsibilities across each business with the goal to enhance financial performance across such areas as investment return, liquidity, and reporting. In simple words, the Chief Financial Officer oversees the essential data and information related to a company’s finance.
Roles And Responsibilities Of A CFO
The roles and responsibilities of the CFO depend on the volume and type of the organization. These are some of the essential roles and responsibilities of the CFO:
Financial Control
A CFO is responsible for overseeing day-to-day accounting and financial operations by keeping a thumb on the many interrelated parts of the company including accounts payable, accounts receivable, payroll, and inventory.
Strategic Forecasting
The process of strategizing and forecasting involves analysis of reports and data, of both internal and external areas, including market expansion, product development, M&A and capital investment, and human capital management.
Treasury
The CFO is responsible for looking after the company’s debts, assets, and liquidity. It includes the physical assets, upcoming investments the company can make, buildings and equipment, etc.
Pursuing a Fractional CFO Practice
With the changing economy and increased business expectations, private firms are more comfortable hiring an executive who has previously worked as a Chief Finance Officer.
Non-Financial Challenges Faced By CFOs
CFOs take on the challenges of the retaining company and work to meet the company’s goals - or in some cases, set the goals! These can include addressing various challenges in the company like increasing profit and meeting growth benchmarks to satisfy stakeholders. Here are some of the top challenges Chief Finance Officers address:
Business Agility
Companies often need to be more flexible but also more rigorous to processes in order to achieve their goals. A good CFO can help adapt business process, make it more centralized, systemized, and organized to stay ahead of financial and operational challenges.
Stakeholder Alignment
The CFO can face the challenge of unifying stakeholders in order to meet strategic markers, which often means a first step of enhancing communications between divisions and on each stage of the process.
Advantages Of Having A CFO In The Company
Financial Transparency
When a company hires a CFO, it is with the understanding of the expertise of the hire. The CFO evaluates the financial conditions, builds strategies, and works with complete financial transparency. CFOs provide timely and accurate insights to the finance of the business.
Risk Management
Every organization needs a person who can manage and mitigate risks to protect the business from error and external events. The CFO will develop the needed amendments after identifying and analyzing the risks and implementing appropriate operational, financial and strategic controls.
Building External Relationships
CFOs identify and cultivate the right types of capital and lending opportunities from various investors. Their leadership role and expertise cna align the business with appropriate funding opportunities to expand further.
Emerging Opportunities For CFO
Digital disruption has led to an economic and financial transformation wherein a sizable part of our global workforce performs remotely. With their extensive experience, CFOs can recognize new skilled talent, digital technologies, innovation, etc for their clients, as well as finding new clients themselves through digital means.
Why Focus On Long And Short-Term Growth?
With the rise of active investors in the market, the CFO must meet the short-term and long-term financial targets and communicate with the enterprise to enhance the value in the new business models. One of the essential elements that drive finance and ensure a strong purpose that motivates the employees. The company that delivers the required and best long-term value with complete expectations is likely to emerge more in the future.
Conclusion
A fractional CFO brings experience and wealth to different divisions of the company. The Chief Finance Officer’s roles, needs, and responsibilities are dynamic, which requires more strategic responsibilities within the organization to achieve more than expected.
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