What is a Chief Financial Officer?
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Do we really need a CFO?
In just the month of September we have witnessed unprecedented changes in the financial landscape. The remaining banks stock prices and capitalization signal extremely tight money for at least the near term. It doesn’t take an MBA to realize; that tight money and an uncertain future are a fact of life for all businesses but especially troubling for your organization.
Bigger companies have fully staffed finance and accounting departments. The accounting department and accounting function serve to record the financial transactions i.e. history of an organization. If functioning properly they will provide a very clear picture of where your company has been but whose job is it to look at and plan for the future?
The Chief Financial Officer is responsible for all financial functions but let’s take a closer look at the CFO’s “Job Summary”:
“To direct and oversee all the financial activities of the corporation including preparation of current financial reports as well as summaries and forecasts for future business growth and general economic outlook, emphasis added. .”
Notice the emphasis on the future. Let me relate an experience from my past. In the 1980’s I had a graphic design and printing business. At one time the printing industry was the fifth largest employer in the United States, it is not anymore. My business was small but growing with a couple of significant accounts. In 1984 I spent $40,000 on leading edge technology and was the first shop in my area to have this technology.
The equipment arrived in January 1985. My staff and I were excited about this equipment and the advantages it would bring. We were so focused on the impact of this equipment would have on business production that I barely noticed that Apple Computer introduced desktop publishing (famous Super Bowl advertisement). This seemingly subtle innovation significantly changed the printing industry. Many printing companies that had been around for years vanished, so did my small business. My point is not to denigrate innovation but to point out the need to keep on eye on the future and plan accordingly.
At this time we are experiencing dramatic changes not subtle differences. All change brings a certain amount of anxiety and fear but it also offers opportunities. If you don’t have a CFO then this job falls to you the owner and just meeting day-to-day issues can be more than a full time job. How is your organization preparing for the future?
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Library of Congress Cataloging-in-Publication
Business/News & Views® / by David. W. Weatherholt
ISBN: 978-0-9823041-1-2 (electronic format)
Published in the United States of America through www.waconsult.com
Published in an electronic format by Weatherholt & Associates, LLC
First Trade Publishing: October 2008
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