What are the duties of the CFO?
The figure of the CFO, or also known as CFO (Chief Financial Officer) for its acronym in English, has grown a lot in recent years. It has always been one of the most important roles in a company, but nowadays it has an increasingly important role because it also plays a main role in the digital transformation process of a company. You no longer only have to be an expert in finance, treasury and accounting, but also have a high knowledge of technology. If you are looking for CFO duties, it is because you are interested in knowing everything possible about this role. In this article, we proceed to explain what the duties of the CFO are in detail so that you can have a broader vision of what his role is in a company.
If you want to know everything about the CFO duties, keep reading.
What is the role of the CFO?
Are you looking for CFO duties? Then, keep reading we explain it to you.
The main mission of the CFO is to ensure the integrity of the finances of a company. What do we mean by this, well, the CFO is the one who has to ensure in the first place that the company’s finances are in order. That the company’s accounting has been carried out in accordance with current laws and regulations and that the company is up to date with its treasury obligations, that is, that it is up to date with its payments to employees, suppliers, tax debtors, etc.
We could say that these two obligations are the most basic, but at the same time the most important. On these two missions, everything else depends. Therefore, we will now proceed to explain all the implications that have to comply with to ensure the accounting and treasury integrity of the company.
What is the required career path to be a CFO?
Currently the required CFO track record may differ somewhat from what it has been historically.
Generally, the typical trajectory was someone first studying business administration and management or accounting. After four or five years of studies, this person started at one of the large financial auditing and consulting firms doing auditing and consulting work for companies. This experience together with the additional training offered by these large firms provides a great knowledge and a great base on the accounting and finances of the company. A very common trajectory used to be, that after a few years in one of these firms, the young man or woman made the leap to a company to the finance team of the same with a role of financial controller, already assuming an important position. After a few years in this role, you can end up being the CFO of the company.
Now, as we said, this definition has changed a bit in recent years. Because the classic profile of an auditor or consultant no longer only aspires to be a CFO. But now it has appeared from the CFO who has an investment banking profile. This profile is a bit different since he does not have as much accounting and auditing training, but he does have a lot of experience in transactions such as M&A, debt issuances, debt loans, or capital or equity raising. That is why this profile is a more transactional CFO profile, while the other is a more accounting profile.
What type of profile would fit better, which of the two? The answer is complicated. Probably the accounting profile is used for simpler companies in which there are not so many needs to make large transactions. The investment banking profile will be more interesting for large companies that aim to make large m&a and debt transactions.
What areas does the CFO oversee?
The CFO is the first and last responsible for the integrity of the company’s accounting. Hence the need to have advanced accounting knowledge. He is also responsible for complying with all legal and accounting requirements of the company.
The CFO is also the person in charge of treasury management. In this sense, it has the obligation to guarantee the survival of the company and that at all times the company has sufficient cash to meet payments and obligations.
Linked to the previous point, and by guaranteeing the survival in terms of a company’s cash, it is the CFO who has the mission of finding different sources and alternatives of financing. Whether they are equity, or debt.
On the other hand, the CFO also responds in relation to reporting. In other words, its mission is also to ensure that investors or any interested party that has access to reporting are able to understand the company’s finances correctly in order to make the right decisions. That is why the CFO has to ensure that there is good financial reporting to investors and partners.
Another of the important points of the role of the CFO is the treatment of taxation and taxes. It is true that you do not have to be the greatest expert, since it is normal to rely on lawyers and legal advisors who provide the main support and knowledge. But, ultimately, it is the CFO who has to deal with this, so he ends up being an expert on the subject as well.
– Accounts payable:
In relation to the field of treasury, the area of accounts payable is linked. In this sense, the CFO is primarily responsible for paying on time and correctly. In other words, there are no setbacks in the relationship with suppliers for this reason.
On the other hand, it is also essential that the CFO guarantees the survival of the company by establishing effective collection processes and methods. Since running out of cash can pose serious problems for the company.
Ultimately, the CFO is primarily responsible for digitizing the company and promoting innovation processes. In this area, it is up to the financial director to implement systems, processes and software tools that automate accounting management, treasury, accounts payable and receivable, among others. This will allow the company to operate faster, be more efficient, and operate more profitably.
The CFO as technological expert and leader of the digital transformation in the company
Another fundamental aspect of the profile of today’s CFO or director is the technological profile. Knowledge of technology is no longer a plus. It is an obligation, and the more the better. The finance department is linked to technology, to implementations, to integrations, and that is why it is a fundamental requirement of this role for the financier of the future. If you were looking for CFO roles thinking he was only in finance, that’s incorrect. Technology is one of the main duties of the CFO of the present and the future.
The CFO is obliged to lead the digital transformation of the company. The implementation of a good accounting system or ERP is one of the first pillars. This is followed by the implementation of a good treasury tool such as Snab, or a good financial reporting tool. As everything has to be integrated with each other, digital knowledge is essential.
Snab, el software de tesorería aliado del director financiero y su equipo
As we said before, today’s CFO has to lead the digital integrations of the 21st century. A good ERP together with a good treasury tool is essential. A treasury tool or software, as we explained in this previous article that you can read here, is essential to manage and centralize your banks, make payments, and make treasury forecasts. Treasury software helps you improve your processes on the following topics:
– Centralization of banks and treasury
– Supplier and customer management
– Management of approvals
– Management of payments and collections
– Other financial services.
We hope that if you were one of the people looking for CFO duties, this article has helped you understand it a little better.
Snab is a platform that automates treasury management and supports the CFO in his role as a digital transformer
Snab is a pioneering platform in Europe for the digitization and automation of the treasury area, bank management, supplier and customer management, and payment and collection management.
Snab automates from the receipt of invoices through an integrated mailbox, the extraction of their data with OCR scanner technology, which allows extracting the relevant information in a matter of seconds, digitizes the management of approvals of said invoices by creating flows of approval, and finally allows you to make the payment of these in one click, without having to leave the platform. In addition, payments are automatically reconciled because the platform pays invoices, instead of making totally disconnected transfers.
Snab provides full visibility and control of the company’s cash flow.