A CFO Perspective
The challenge of writing a Blog like this is the diverse experience and backgrounds of the readers. Some readers could be high level executives with many areas of responsibility while others may be in smaller companies with limited staff and more narrow responsibilities, and yet still other readers could be in public accounting and are passing the article to younger staff and/or clients. Other readers may not even be involved as a manager with an entity. Needless to say, writing relevant posts of interest to all these readers is difficult. Especially when postings length is limited to only some many words…….
This post will be addressing how the Chief Financial Officer (CFO) interfaces with the “C” suite and other managers of their entity. Depending on the size of the entity this CFO interface could be extensive or be limited to just one or two individuals.
Regardless of size considerations, the CFO interface is essentially an education, coordination and monitoring function.
Education: The CFO needs to educate and create an awareness of the many areas, functions and transactions that impact the financial affairs of an entity. Not to overstate the importance of the CFO’s role, but there is very little that happens within an entity that does not impact the entities finances in one way or another. The more the managers and leadership of an entity understand, support and appreciate this fact, the greater the probability is that the entity is being well managed.
Coordination: Once the leadership and managers of the entity appreciate and support the role of the CFO, then the work of coordination begins. Frequent contact with all aspects of a company is essential for a CFO to effectively execute their role. For example, it is only by understanding how sales transactions are received, processed, approved, recorded, reconciled, collected, monitored, managed and exceptions are handled can a CFO (or their staff) effectively advise the other managers and create a useful support system for the entity. To be effective, a CFO and the entity’s leadership both need to extrapolate this concept throughout the entire entity.
Monitoring: It is only by monitoring (which by my definition includes reporting) all the various activities of an entity can the CFO and the entity’s leadership effectively manage, direct and control the entity. As the old saying goes, “if you can’t quantify it, you can’t manage it”. Providing and reacting to daily, weekly and monthly reports with trend analysis and important observations are critical to an entities success. Again, the more this is appreciated and supported by the entity the more likely the entity will be successful. We’ll be talking about dashboards in a later column.
You might have noticed that I have used the term “entity” throughout this article. The reason is that much, if not all, of what I am writing about is true for companies for profit as well as for non-profit entities. Entity is being used to refer to both profit and not-for-profit entities.
Please contact me with your feedback at reg@regbaker.com.
I am looking forward to hearing from you with suggestions for future posts.
Reg Baker, CPS PFS
http://www.regbaker.com/
