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What are the roles of a Chief Financial Officer (CFO) in a modern firm?
It is not known to all who wish to enter the corporate finance world that three decades ago, the role of a CFO was merely to give financial inputs to the firm. He or she acted more like an accountant than anything else. The duties and responsibilities, therefore, were limited and the CFO needed to work pretty less on analysis and budgeting on their part.
However, the situation has changed dramatically in the last three decades. The modern CFO is not just an analyzer and decision-maker but he or she is also a key member of the top brass of a company. The CFO knows about finance and its repercussions more than anyone else in the organization.
Note − Three decades ago, the roles and responsibilities of CFOs were very limited. Now, most successful organizations have a CFO on their board.
Roles of a Modern CFO
The skills needed to become a top-notch CFO have changed with the roles and responsibilities too. Here are some roles that a CFO must carry out efficiently −
Leadership − A modern CFO needs leadership skills to present the financial situation across all departments of the company. He must lead a team of employees who may need support for serving their duties smoothly. The CFO must be able to format and present financial data via clear, concise, and accessible communication.
Operations − CFOs must understand the company's business model and convey it to the stakeholders. The modern CFO must coordinate with the marketing,business, and operations departments to let them understand the financial resources of the company. Needless to mention, the CFO,therefore, needs to know about the operations of the organization fully.
Note − A CFO must be a Leader and he/she should be able to operate singularly on behalf of the finance team.
Controls − A CFO must control the expenditures of litigations, along with estimation and expenses for risks. This makes the CFO a controller of business activities who is on the driver's seat to steer the organization on the right path.
Strategy − A modern CFO is a decision-maker and in this role, he/she has to take strategic decisions that fall under financial functions. The CFO must know the pros and cons of a business deal and execute his duties with conviction.
Modern CFOs work in a dynamic situation and they need to be agile while performing their duties. As the competition grows and companies strive for market share, the CFO finds himself in a very responsible position to make decisions for the company and make it successful.
Note − The modern CFO is a Controller and decision-maker for the company.
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