Type of paper:Â | Essay |
Categories:Â | Management Finance Profession Financial management |
Pages: | 3 |
Wordcount: | 567 words |
A Chief Financial Officer is an individual who is designated and purposely contracted in a company to account for the administrative and the financial budget of a corporation. He or she lies in the task of balancing the capital budgets and implementing the changes that are planned for the enrolment, investments and risks security implementation to enhance the safety of the companys assets ( Lapovsky & McKeown-Moak 1999).
A CFO has got various responsibilities that amount to a leadership role. He or she is supposed to be efficient and someone who can be able to comprehend and provide innovative solutions to risks. He or she is anticipated to be a creative and critical thinker who would see an opportunity where others can't and transform it to merchandise in the organization. The responsibility of a CFO, therefore, is to understand, control and maintain the cash flow position throughout the company (Guzik, 2011). He or she knows the sources and uses of funds, security, and documents that the management receives and put in custody. He has got the authority to establish accounting policies and procedures for credit and collections, purchasing, payments of bills and other financial obligations.
The CFOs psychology, therefore, involves the strength and the ability to collect the companys information and being able to provide a sustainable economic solution to the enterprise. He or she understands the model of the business to generate customer value and translate the operational metrics into the measures of the performance. He or she establishes the lines of communication with the investments bankers, financial analysts, and shareholders (Guzik, 2011). He is the one who spearhead sources of capital either from borrowing from commercial banking or other leading institutions. He or she analyzes the companys shareholder relations policies and information programs, with the addition of the annual interims reports to the shareholders and board of directors.
Conclusion
In that the CFOs are a great help to the companies in managing the financial aspect and cash flow, there are still challenges that might face them making the management drag down. The cash management might be an issue in that the CFO might not be able to find new ways to redistribute capital in the companies that is experiencing significant growth regarding profitability. The challenge of the Affordable Care health Act also presents a significant challenge to the CFOs. In the case of leadership succession, the CFOs will be challenged significantly on how to drive the shareholders value. Since the CFOs are the one who are responsible for the protection of the profitability of the company, he will require reviewing the cost-benefit of investing in new technology or equipment and create a workable staffing plan. This can be very tempting and challenging as it involves risks that are not defined.
CFOs are challenged as they are expected to do more. Their responsibility includes a lot of expectation as they are required to build companys relationships. The CFOs are however recommended to finding necessary changes and innovative way and strategies to ensure profitability of the enterprise. Their plans should be well stipulated and ahead of everything. They should be able to oversee the challenges in advance and expect an increase in profits.
References
Guzik, M. (2011). CFO Techniques: A hands-on guide to keeping your business solvent and successful. Berkeley, CA: Apress.
Lapovsky, L., & McKeown-Moak, M. P. (1999). Roles and responsibilities of the chief financial officer. San Francisco, CA: Jossey-Bass.
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Free Essay on the Role of a Chief Financial Officer Research. (2019, Jul 08). Retrieved from https://speedypaper.net/essays/a-chief-financial-officer-research
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