To learn about the main tasks of a CFO, one must simply consult the Wikipedia, the world’s foremost authority on all things. The oracle of Wiki states “The chief financial officer (CFO) is a corporate officer primarily responsible for managing the financial risks of the corporation. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management. In some sectors the CFO is also responsible for analysis of data.” If this job description is accurate and is truly what most CFO’s accomplish, it would adequately explain why the average tenure for a CFO is only three years.
Sure, there is a laundry list of core essential tasks which can and should be accomplished by the CFO to help the company succeed. These tasks of a CFO include:
• Financial projections to chart the course of the company
• Budgets which help to monitor company performance based on the projection
• Securing needed capital necessary to carry out the plan
• Risk management to keep the company from being derailed
• Safeguard the company’s assets from theft, damage, etc.
• Compliance with existing laws, financial and tax reporting requirements.
But these tasks of a CFO represent where the bar starts, and will not assure success by themselves. Without growth, companies lose vision. Little mistakes are magnified into big mistakes because there is no margin for error. Then no risk taking or innovation occurs. The company experiences high turnover as boredom from lack of direction sets in. Internal fiefdoms develop, causing rivalries that diminish the energy and creative talents of key employees. I’ve seen it countless times, even at truly promising companies. Without vision and growth, the company perishes.
So which companies need a CFO? Just the ones that want to be successful. If your company has $50 million or more in sales or 100 or more employees, you likely need a full-time CFO. But even small and medium sized businesses can now team up with an affordable part time or temporary CFO on an outsourced basis. Whether full-time, part-time, permanent or temporary, the key is for the CFO to fully understand and buy into the role of unleashing the creativity and leadership of the business owner.