Chief Financial Officer CFO- Managing Money Matters

Posted in Finance Articles, Total Reads: 3142 , Published on August 04, 2011

The aim of every organization is to make profits. No matter what the industry scenario, no matter how much is the demand, no matter what is the economic position of that industry, the stakeholders and employees of an organization always strive to get more money. But in this world of cut throat competition, generating revenue is easier said than done. This is where one of the most pivotal figures in an organizational hierarchy has the most important role to play. And that is the position of the Chief Financial Officer or CFO.


CFO - Up the Ladder ?

The CFO of a company is one the most important assets for a company. A CFO has to give his best despite economic pressures, high shareholder expectations, provide transparency yet flexible workplace and generate revenue for the company. CFO's have to be leaders who need to show the team how to make the best use of opportunities.


Some of the major challenges which a CFO comes across are discussed below.

1. Making proper capital investments

Managing the funds of a company is a herculean task for a CFO as he has to ensure that investments made in mutual funds, stocks and shares benefit the company. CFO's need to have a value based approach which would not only help them understanding the market scenario but would also enable them to live up to the trust of the shareholders.


2. Reporting financial transactions

CFO has a major role to play in ensuring that there is transparency in the organization when it comes to policies, accounting and regulations. Moreover, it is his ultimate responsibility to report to the directors and is answerable to the stakeholders.


3. Tax planning

With ever changing government regulations, the CFO has to manage the taxes of the company and has to make sure all procedures are carried out responsibly and legally.


4. Adapting to new regulations

The industry regulations and policies are constantly changed by the government. Hence, a CFO must be always on a vigil to understand the pros, cons and legalities of any change that occurs in the industry. Moreover, he has to also keep an eye on the competitors and also foreign players who are looking to enter in the same segment.


5. Motivating employees

CFO has to make sure that the attitude of the employees remains focused on the task at hand despite fluctuating market conditions. The CFO has to promote teamwork and has to make sure that the right duty is allotted to the person who has the required skill.


6. Financial Risk management

With instability in the markets and events like global recession, the CFO is responsible to study the key risk indicators. He has to make sure that the entire organization focuses their approach on risk management in order to fight it out.


As the competition intensifies in this world, the role of the CFO becomes more and more critical in handling the finances of a company. The CEO might hold the top most position, but the CFO has the reins of the company in his hands as he is the one who faces the challenge of making money for the whole company.

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