As the roles and Responsibilities of most other corporate positions have changed and evolved with the passage of time and the changing business environment, the role and responsibilities of the Chief Financial Officer have changed and evolved as well.
Traditionally, the CFO was considered the ‘head bookkeeper’ of the organization, responsible for collating data, preparing reports, and submitting them to the CEO. However, that is no longer the case. The Chief Financial Officer is now valued almost as much as the Chief Executive Officer of a company.
The Chief Financial Officer does a lot for the welfare of the company and plays a vital role in the value creation process of the company. Let us understand the emerging role of a CFO in the current environment and its contribution to the business.
The Emerging Role of Chief Financial Officer
Due to operational difficulties and equitable distribution of workload, the position of CEO was further divided into CFO and COO positions. The CFO role has since evolved to meet modern business requirements, as shown below: Strategic Consultant: With the changing times, CFOs have evolved into strategic advisors for their organizations.
A Chief Financial Officer is now a fundamental part of the growth of an organization’s strategy and overseeing its realization. This is probably the biggest change from being ‘head bookkeepers’ and ‘money crunchers’.
- Leader: SBS-Global Effective leadership skills, technology understanding, and excellent conversation skills are some of the key features of a modern-day Chief Financial Officer. They are willing to take ownership and often lead large, multi-cultural teams operating in diverse geographic locations. They can delineate complex information into simple, small data that is well understood by the public. CFOs are also responsible for creating the necessary organizational structure and placing the right sources in the right places for F&A teams.
- IT And Data Master: New-age CFOs must understand the development of technology, as it helps them harness the potential of data to meet larger organizational aims. Being well-versed with data visualization tools helps CFOs to present knowledge to the CEO/Board in an easy-to-understand and effective method. IT advances can sometimes have a significant impact on an organization’s revenue and profitability as well. The CFO plays the most powerful role in the choice to outsource a company’s F&A activities and in identifying the right FAO partner for this, with technology being an important consideration.
- Head of Operations: The current Outsourced CFO services have substantial operational responsibilities, including financial control. He should be well-experienced to identify the need to strengthen the structure by providing expertise and a unique perspective by bringing in new reforms. The reforms should be well implemented to improve the operations and finances of the company. Therefore, Chief Financial Officers play a vital role in controlling the internal environment and providing valuable financial success to the company.
Focus on results, not efficiency
The finance function is now often being evaluated in terms of its effectiveness, its ability to deliver what the business needs, rather than a more narrow-minded on efficiency. The CFO is responsible for ensuring that this requirement is met on an ongoing basis by his team.
CFO job description should include
- Providing leadership, command, and management of the finance and accounting team
- Providing strategic suggestions to the CEO/Chairman and members of the businessperson management team
- Contrive rules for financial forecasting and budgeting, and oversee the development of all financial reporting
- Advising on long-term business and financial planning
- Establish and develop relationships with senior management and external partners and stakeholders
- Responsible for reporting to the board and shareholders
- Reviewing all formal finance, human resources, and IT-related processes
- Business Facilitation and Compliance
In the past decade, we have seen a drastic change in the business landscape. And, accordingly, the roles and responsibilities of the current Chief Financial Officer are no longer limited to financial accounting.
They are expected to play a leading role in a company’s strategy, communications, and operations, which goes beyond bookkeeping, compliance, budgeting and reporting, which remain a part of their agenda. In short, today’s CFO plays the role of an ‘all-around catalyst’ in the organization.
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