Do you see yourself making executive financial decisions that affect the future of entire companies? Do you want a job that will earn you more than enough money to pay the bills?
If so, you might want to look into becoming a chief financial officer.
CFOs have essential roles inside companies. They’re a position that many business students across the world work towards—and it’s no wonder why. The role allows people to hone all of their business skills.
But what does a chief financial officer do? What do the best chief financial officers do that sets them apart from the rest?
Read on to learn all about the different CFO responsibilities.
Report Financial Information
Many of the major CFO responsibilities include controllership duties. Chief financial officers need to report important financial information to the relevant parties whenever necessary.
Large companies have many different types of stakeholders. These can include anyone from shareholders and analysts to creditors and other management employees. All of these people need to understand the latest financial events.
If a CFO fails to report this sort of information to the relevant people, they won’t be able to make subsequent decisions. This can bring the entirety of business operations to a halt.
Look at the Company’s Current Finances
Treasury duties form another important part of a CFO job description. Chief financial officers spend a lot of time looking at a company’s finances and deciding what to do with it.
CFOs need to have the skills necessary to invest the company’s money in the right places. They need to strike a balance between risk and reward while also considering other factors like liquidity.
All of this affects the current financial structure of the company. The actions that a CFO takes will affect things like debt and equity levels.
Map Out Economic Strategy
Besides looking at the past and the present, chief financial officers also need to look at the economy of the future. They’re in charge of mapping out an economic strategy that leads to profit and growth for a company.
CFOs need to take a macro-level look at their company and identify which areas are doing well. They then use that information to capitalize on the competitive advantages of the company.
For example, the chief financial officer of a tech company needs to pinpoint which tech products bring in the most money. They’ll then figure out how they can use those products to turn the biggest profits.
CFO Challenges
As you might expect, chief financial officers face many challenges in their workdays. To be effective, they need to respond to them as efficiently as possible.
Let’s take a look at three of the biggest CFO challenges that they often need to resolve:
Building an Effective Team
Many chief financial officers also have a role in the hiring process. They help decide which employees to bring on, as well as which ones might need to go.
As anyone who works in business can tell you, most executives have smaller budgets today. Because of that, they don’t have the resources to bring on as many people as they did traditionally.
At the same time, hardworking and effective employees are also more important than ever. To ensure the success of a company, CFOs need to ensure that they’re only hiring the best of the best.
Embracing New Technology
If you hope to one day work as a CFO, don’t worry—you don’t need to also be a tech expert. However, you do need to be comfortable using technology, especially in ways where it streamlines business.
Applications, hardware, and software can all play an enormous role in the success of a business. Companies that take advantage of the latest tech often gain a competitive advantage over those that don’t.
Be prepared to research the latest types of tech, such as cloud computing and SAAS. CFOs are always on the hunt for technology that can make their lives and that of the company easier.
Responding to Market Trends
No matter what sort of market you expect to one day work in, you can be certain that it won’t be stagnant. Political, social, and economic trends occur and shake markets to their cores. CFOs need to respond to these.
To do that, chief financial officers spend a lot of their time paying attention to these different types of forces. In doing so, they ensure that they’re ready to respond to them.
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How Much Does a CFO Make?
If it sounds like CFOs have a lot of responsibilities, that’s because they do. But don’t worry—most chief financial officers receive more than enough compensation to make up for their hard work.
The average chief financial officer earns $136,602 a year. In larger companies where CFOs have a longer list of responsibilities, they can earn much, much more than that. Such a high salary makes the position well worth it.
What Does a Chief Financial Officer Do? Quite a Lot
Whether you’re mapping out your future career path or want to learn more about the world of business, make sure you understand the different positions.
What does a chief financial officer do? As this guide explains, quite a lot. Use this guide as a resource to help you understand everything that a CFO needs to do.
Do you now have a better understanding of what the CFO job description looks like? If you do, make sure to check out the rest of our site for more business-related guides and tips.