A Financial Director, often referred to as the Chief Financial Officer (CFO), is a professional whose primary functions within the company they are employed by are the overall management of the entity’s financial agenda. The responsibilities they acquire under their employment agreement will depend greatly on the size and type of the entity they represent. The simple truth is all Financial Directors have similar core responsibilities.
Financial planning, record keeping, and reporting/managing financial risks are essential to the success of the Director. Depending on the entity, the responsibility of income and dividend reporting may also rank among their top priorities. While the specifics and details of a Financial Director’s job can vary, the shape of the profession remains true.
How will a business achieve financial objectives? What is the determining factor in setting financial goals? Proper financial planning determines just how the company’s vision will come to life.
This is a turnkey process in the role of the CFO. By assessing the business environment, identifying resources needed, and quantifying the cost of the required resources the financial plan brought forth by the CFO becomes an evolving recipe for the business’s success.
Making sure the recipe turns out as planned and doesn’t fall flat is the reason a CFO must tackle another aspect essential to their job function, financial record-keeping. Maintaining cash flow, expenditure, profit and loss sheets, and applying the rules of accounting keep the company on track to meeting the vision set forth by the implementation of the financial plan. Accurate financial record keeping managed by the CFO reduces the potential problems that could arise and take the company off course from reaching their financial goals.
The CFO is responsible for the Chief Executive Officer and typically a board of advisers. Accountability is part of the very infrastructure of the job which is grounded in accounting. This accountability takes form through the use of financial reporting. The primary objective of a CFO in financial reporting is to provide the end user with the financial position and performance data of the company, and its financial status. It enables the company to see changes that may need to be made to ensure the completion of and adherence to the company’s goals and financial vision. The CFO is primarily responsible for the accurate depiction of the company’s position by ensuring that financial statements and reports are correct and in compliance with audits.
Another core responsibility of the CFO is managing financial risks. This is the strategic calculation that sets great professionals apart from the rest. Like a game of chess, a great CFO takes his or her time to assess the board and become knowledgeable of all possible moves and the potential outcome if the move is made. It is the CFO’s main objective to evaluate and manage exposure to risk. This requires strategic moves to identify the source of the risk, measure its potential value, and formulate a plan to address the potential outcome.
The Chief Financial Officer is the binding agent of any successful entity. Like the saying goes, “money makes the world go round”. The same is true of the Financial Director. A prosperous and prudent CFO/Director paints the financial picture for the future of the company he or she works for.