What Services Do CFOs Provide?

The Chief Finance Officer (CFO) is responsible for ensuring that their company is properly maximizing its revenue and working to achieve profitability while minimizing risk. This person also helps assist with strategic planning to ensure goals are met which is important when attempting to stay ahead of your competition. 

A CFO can work on-site or virtually with every department in the organization to manage certain aspects of the business. There are CFO services such as CEO/board advisory, accounting oversight, internal controls, strategic planning, and more. 

Here is a breakdown of how CFO services provide purpose to an organization’s long-term goals:

CEO/Board Advisory reports directly to the owner or CEO, but they also might assist the board of directors by providing advice on business operations and other matters. It is important to note that not all companies have a full-time CFO. Instead, some CEOs handle financial decisions themselves, while others rely on the help of a CFO.

Accounting Oversight typically involves managing experienced accounting staff and reviewing financial reports regularly for changes or that need further explanation. 

Internal Controls sets rules or practices designed to provide reasonable assurance that transactions are properly executed, assets are safeguarded, records are accurate, and the objectives of the organization are achieved. The CFO can help improve internal controls by identifying where they are insufficient or ineffective. A good example would be an anti-fraud policy that requires all financial transactions to be approved by two people but does not apply the policy equally across all departments. 

Working with Banks, Financing, and Investors includes working with banks to obtain loans or credit lines; vehicle financing and preparing reports for companies who want to invest in your business. A CFO is often responsible for negotiating terms of loans and other financing arrangements with banks, creditors, and investors.

Strategic Planning deals with getting ahead of the competition or any other issues that may arise within an organization. Knowing what your business is about and how you plan to achieve success will help keep everyone on the same page to achieve a common goal.

Budgets and Cash Flow Projections provide a road map of how current business trends will influence future trends by looking at both historical data and the strategic plan and making projections. Determine future potential cash shortages and how to navigate through them so it does not impact business operations.

Financial Reporting requires preparing financial reports for shareholders, lenders, the owner(s), department heads, and auditors in accordance with GAAP.

Policies and Procedures and Process Improvement includes documenting current company policies and procedures. Determining missing policies and creating new ones. Providing insight on how to improve a procedure’s efficiency through automation or change in the workflow at the same time ensuring internal controls are in place. In addition to redesigning and improving the companies existing procedures, the CFO might also collaborate closely with the owner or CEO to implement new procedures. 

Audit Preparation ensures that the financial reporting follows GAAP, supporting documentation is available, variance analysis to budget, and prior year has been completed. The CFO is also responsible for making sure that transactions are recorded in correct accounts and that all necessary balance sheet reconciliations have been performed. In addition, the CFO should mitigate any potential negative audit findings by correcting current practices. 

Audit Management ensures that audits are planned, executed, and reported to the organization’s board of directors. A good CFO manages both internal controls and inquiries related to financial statements. 

Asset Management means documenting all fixed assets either manually or through an Asset Management system. Assessing whether assets should be disposed of. Determining whether the asset should be leased or purchased.

Accounting System Selection provides input on the critical features of the potential accounting system choices, training the financial staff on how to use these systems, and assistance in selecting consultants who will implement the software and or modules and managing the conversion process.

Oversee Tax Filing includes collaborating closely with the company’s CPA firm to ensure that the financial information requested is given to them accurately and timely. In addition, the tax filings are completed, reviewed, and filed before the deadline.

Chart of Account Structure includes design and development within the accounting system that both captures the key financial information through account grouping and dept/job profitability while at the same time following GAAP reporting. 

Hire and Train Bookkeeper means looking through resumes, interviewing the candidates, and making the final decision on who will be hired. The CFO also provides help with training new employees by teaching them how to use certain business software programs. 

Selection of a CPA Firm for Audit/Tax means determining the best professional accounting audit/tax firm that is best for the company based on industry expertise, cost, and working relationship. 

Profitability Enhancement works to ensure that budgets are managed efficiently. Billings are completed timely and accurately. Both direct and indirect costs are strictly monitored. When unanticipated changes occur, decisions are made immediately to mitigate or reduce the potential negative outcome.

Assist in Hiring Controller or CFO & Backup to Controller/CFO, if Leave. 

Cost Reduction Strategies oversees the financial side of an organization. They collaborate closely with other managers to ensure that they are staying within their budget and working towards cutting costs where possible. Managers may propose innovative ideas for reducing costs, but it is up to the CFO whether those ideas will be implemented in a budget.

Merger/Acquisition/Sale in accordance with the strategic plan. The CFO will assist in determining the acquisition target or potential merger firm. Assist in the negotiation process and perform due diligence. Advise the CEO and Board of the findings. If merger or acquisition, manage the integration of the companies. If sale, manage the transition to the acquiring company.

Business Plans identify and assess the financial implications of all elements of the plan. This includes making sure that there are sufficient funds in place to meet projected goals. Other services that CFOs may provide include guidance on taxation, legal issues, budgeting, organizational structure, hiring employees, and compensating employees.

Financial Analysis helps you to better understand why certain numbers may be changing so that meaningful decisions can be made to improve performance. A declining trend of a KPI could be a warning sign for the business, so addressing the cause immediately is imperative.

Forecasting helps set goals for next year and benchmarks to track how well you are meeting those goals. Planning with a certain goal in mind will lead to developing more effective strategies that put you ahead of your competition.

Performance Management shows employees where they are currently excelling and what they need to improve upon throughout the year. That way managers gain insight into how well their team members are performing so they can assess future opportunities for them within the company based on their strengths and weaknesses.

CFOs provide beneficial services to an organization such as financial analysis, budgeting, forecasting, financing activities, performance management, and strategic planning. These services will keep organizations on the right path to reach their long-term goals while providing them with the guidance to make informed decisions. 

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