What Does a Chief Financial Officer Do? A Simple Guide

If you want your company to run smoothly, you need to handle your finances carefully. That isn’t just about making a steady profit; it’s about knowing the best ways to use and invest that profit to grow your business.

That’s where a chief financial officer comes in.

Most of us have heard the job title CFO, but the name doesn’t tell us much. As a result, you might be wondering, “What does a chief financial officer do?” That’s a question with a lot of answers.

There are many responsibilities that fall to a chief financial officer. Keep reading for a breakdown of the chief financial officer job.

What Does a Chief Financial Officer Do?

What is a CFO? Put simply, they are the person in charge of managing a company’s money. Of course, that’s easier said than done; even a small business CFO has a lot of numbers to juggle.

A chief financial officer isn’t just concerned with a company’s current profits and debts. They are in charge of all the finances–past, present, and future.

A CFO is responsible for reporting their historical finances, managing current cash flow, and aiming to improve that cash flow moving forward.

Also, a CFO should never be confused with a CEO. Despite the similar title, the two jobs are very different.

Reporting Finances

If you ask someone with experience, “What does a CFO do all day?” they’ll likely tell you they spend most of their time reporting. CFOs are responsible for reporting a company’s historical financial data.

These reports are presented to shareholders, employees, analysts, and more. The accuracy of these reports are of the utmost importance.

Because the financial reporting aspect of the job is so crucial, many CFOs rely on tools like Qlik. Qlik reporting allows for streamlined and efficient financial reports.

Money Management

When most people imagine a chief financial officer career, they probably think about managing a company’s cash flow: ensuring that profits exceed costs, managing debt, and so on.

These are indeed major aspects of a CFO’s position. The CFO is involved with various aspects of a company’s cash flow, such as accounts receivable and accounts payable.

The CFO also deals with compliance issues. This means that a CFO ensures a company is meeting all relevant regulations, which prevents the company from getting costly fines.

Financial Planning

One of the most important aspects of the chief financial officer job is financial planning. A solid financial plan is key to growing a business. It’s the CFO’s job to put such a plan in place.

Financial planning is all about knowing what to do with the money available to you. Setting budgets, investing cash, and finding new streams of income are all factors of financial planning.

Financial planning is also the most creative part of the job, especially for a small business CFO looking for exciting ways to grow their company.

A Crucial Part of Any Business

Now we’ve answered the question, “What does a chief financial officer do?” If you have more questions about business operations, browse the rest of our blog. You’ll find countless articles to better understand and improve your business!

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