The role of a Chief Financial Officer shined during the global health crisis. They are only becoming important by the day since 72% of CEOs, CFOs, and other experts believe their job will increase in the following years.
The current events also caused a shift in the CFO roles and interim CFO positions. They now focus more on business value generation, becoming more of a strategist. Either way, CFOs allowed several companies to survive the pandemic and keep growing.
Does your business need a CFO? Read on and learn more about the role and when you need them.
What is a CFO?
A Chief Financial Officer is a top-level executive responsible for the business finances. They hold the third-highest ranking. They assist and report to the Chief Executive Officer while working with the other senior managers.
What Does a CFO Do?
A CFO handles everything related to cash flow, taxation, and financial planning. They manage finance and accounting divisions, ensuring their data is correct and completed on time. Some tasks they might get involved in are:
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- Making financial strategies
- Managing the income and expenses
- Obtaining funding
- Doing cost-benefit analysis
- Analyzing company strengths and weaknesses
- Identifying business risks
The Chief Financial Officer has significant input in the business investments and capital structure. They provide data that influences several decisions in the company, which is why it must be accurate.
Why Do You Need One?
A company does not usually hire an in-house CFO until it hits $50 million in annual revenue. Businesses like Outreach and Snapchat adopted this practice.
If you make between $1 million and $10 million, you would typically hire a controller to oversee your financial activities.
Still, you might need the expert financial insight of a Chief Financial Officer. Here are some situations that would call for one.
Your Business Is Scaling Up
Are you experiencing rapid growth in your business right now? Are you making exponential sales and needing to hire new employees aggressively?
You might need a CFO. They can help you avoid overspending and make bad financial decisions.
You Have Financial Issues
If you’re getting overwhelmed by the financial processes and decisions, you need someone else to oversee them. It’s a good sign you have to hire a CFO.
Cash flow issues aren’t uncommon, too. You may also have profitability challenges you can’t solve. Finding solutions to these is the CFO’s job.
You’re Selling Your Company
When you sell the company, you will have to prepare financial documents and face intense processes. A CFO can help you navigate this demanding time.
The same goes for going through an acquisition or buying a company. If you need a CFO for this purpose only, you can outsource them. You can also get services from cassmerward.com.
Hire a Chief Financial Officer Now
Should you decide to hire a Chief Financial Officer, move fast. Many companies are still suffering from the effects of the recent health crisis.
Meanwhile, some are realizing the importance of proper financial planning. Prepare your company for the future by getting an expert on board.
Did you find this guide helpful? To learn more, feel free to browse our other articles today.