I asked my colleague Gail Bendert to provide some insights into the different financial roles needed to support small businesses. Please reach out to Gail for more information.
Many clients ask, "what is a CFO"?
If you haven't worked in senior management for a corporation, this may be a term that you don't understand. You might be wondering what is a CFO?
According to Investopedia, a CFO (Chief Financial Officer) is:
Chief Financial Officer — CFO
A chief financial officer (CFO) is the senior manager responsible for overseeing the financial activities of an entire company.
The CFO's duties include financial planning and monitoring cash flow. He or she analyzes the company's financial strengths and weaknesses and suggests plans for improvement.
The CFO is similar to a treasurer or controller in that he or she is responsible for overseeing the accounting and finance departments and for ensuring that the company's financial reports are accurate and completed on time.
Chief Financial — CFO
The CFO reports to the president, but has a major say in the company's capital structure, investments and how the company manages its income and expenses.
The CFO works closely with other executives and plays a major role in any company's success, especially in the long run. Becoming a CFO requires extensive financial management experience as well as educational credentials in finance or accounting.”
Why Companies Big and Small Need a CFO's Expertise
In larger companies, separate divisions of the company may have Controllers which report to the company’s CFO.
In smaller companies, the CFO and Controller may be the same person.
In most cases, independently owned (small) businesses will also benefit from the assistance of a CFO or Controller that provides oversight of their financial reporting.
It's important to confirm it is accurate and timely and who helps monitor cash flow and the company’s financial situation so that any financial decisions are informed ones based on accurate and up-to-date data.
Additionally, the CFO or Controller also serves as a sounding board and reality check for the business owner/CEO providing an objective perspective, especially in times of added pressure.
Many independently owned businesses can’t afford or don’t need a full-time CFO; however, I feel that independent business owners are often faced with some of the same decisions large corporations face regarding:
- Day-to-day operations
- Investments in personnel
- Investments in equipment
- Other financial decisions that will ultimately affect the overall performance of the business
My role as a “Consultant CFO” or “Crisis Controller” is to provide similar services of a corporate CFO to those independent business owners who need or want the guidance of an accounting specialist when they are in start-up mode, in times of rapid growth, or when circumstances change, and a “crisis” arises.