The Chief Financial Officer (CFO) is a crucial member of any organisation's executive team. This high-ranking financial advisor is responsible for managing the organisation’s financial strategy and ensuring its financial health.
The CFO oversees all financial operations, including financial planning, reporting, and analysis, and is accountable for the accuracy and integrity of financial information. As a result, the role of CFO has evolved significantly over the years, and today's CFOs have a wide range of responsibilities that go beyond traditional financial management.
In this guide, we’ll explore:
- What a CFO is
- CFO duties and responsibilities
- Hiring an in-house CFO vs virtual CFO services
We’ll also explain how hiring a Liston Newton virtual CFO can streamline your finances and promote business growth.
What is a Chief Financial Officer?
A Chief Financial Officer (CFO) manages the financial operations and strategy of the company. The CFO plays a critical role in ensuring the financial stability and success of the organisation and is often involved in strategic decision-making and planning. They report directly to the Chief Executive Officer (CEO).
In addition to financial expertise, the CFO must possess strong leadership and communication skills and the ability to work collaboratively with other executives and stakeholders within the organisation.
According to Indeed’s career guide, becoming a CFO requires having the following:
- A formal qualification
- Industry experience
- Leadership skills
- A solid network
- The ability to understand and analyse financial data
What are the responsibilities and duties of a CFO?
One of the main duties of a CFO in an organisation is to become a finance manager. Basically, this means providing valuable insights and analytics on the company’s financials and offering advice on managing them better.
This includes completing tasks like:
- Cash flow analysis
- Risk management
- Financial reporting
- Dealing with accounts
An experienced chief financial officer is responsible for analysing the company’s current position and finding ways to improve overall cash flow.
Often, most companies are exposed to financial risks at any given time. Therefore, a business requires a CFO to help make better growth decisions by analysing accurate data and financial insights. A CFO will find any potential risks that could harm a company’s financial position and create strategies to quickly resolve any major issues.
Reporting and forecasting
As the leader of the finance and accounting team, one of the top tasks on a CFO duties list is to manage financial reporting, forecasting and budgeting. The CFO will prepare financial statements, conduct a financial analysis and manage cash flow. Chief financial officers will also make projections for the future and help aid in business growth.
Bookkeeping is an essential function of the CFO's role, as accurate and timely financial record-keeping is crucial for informed decision-making and compliance with accounting standards.
While the CFO may delegate some bookkeeping tasks to staff, they are ultimately responsible for ensuring that financial records are complete, accurate, and up-to-date. This includes overseeing the maintenance of general ledgers, accounts payable and receivable, and payroll records. The CFO is also responsible for reconciling accounts, ensuring that transactions are recorded correctly, and preparing financial statements in compliance with accounting standards.
Budgeting is a crucial function of the CFO's role, as it helps the organisation to plan and manage its resources effectively. The CFO is responsible for developing and implementing the company’s budget, which involves working closely with other members of the senior executive team to understand the organisation's strategic goals and objectives.
The CFO must also ensure that the budget aligns with the organisation's financial resources, revenue streams, and risk tolerance. In addition to creating the budget, the CFO is also responsible for monitoring actual financial performance against the budget, identifying any variances, and taking corrective action if necessary.
Virtual CFO services vs in-house CFOs
You may ask yourself, ‘what is an outsourced CFO service?’ Put simply, a virtual CFO is an outsourced professional who provides financial services remotely. They may work with multiple organisations and offer flexible services based on the company's needs, ranging from basic bookkeeping to more strategic financial planning, managing the company’s financial reports and analysis. Virtual CFOs are often more cost-effective than in-house CFOs.
This is a clear distinction from the traditional in-house role of CFO, where a full-time employee of the organisation works on-site and is responsible for managing the financial operations of the company. Many chief financial officers also tend to work closely with another senior executive responsible for company growth, such as the chief operations officer.
If you’re not sure whether you need a CFO, read our guide on how to know when it’s time to hire a CFO.
Find out more about our CFO services
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- We generate a detailed report from your strategy session
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Tick off your CFO duties list with help from Liston Newton
If your business could benefit from a financial expert, contact the team at Liston Newton. We offer in-person and virtual CFO services that can help with your financial management and business growth goals.
Our virtual CFO services are suitable for all businesses, big or small. With our 40 years of experience, industry knowledge and financial management software, we can find you a CFO who successfully completes all duties and responsibilities.