I like to think of a business as an automobile. In that metaphor, the CFO is responsible to ensure that the vehicle is in proper working order, and has gas in the tank. When its running well and full of gas, the rest of the team can drive it successfully.
A CFO, or Chief Financial Officer, is the title of the head of finance in an organization. A good CFO is a trusted, experienced, objective and open-minded leader with a specialization in some form of finance or accounting. This role is responsible for the overall financial wellbeing of the organization and in Canada this position is most often held by a Chartered Professional Accountant (CPA). The day-to-day role of the CFO may vary between organizations, but almost always contains common elements such as financial reporting, payroll, accounts payable/receivable, compliance, assurance etc., which are described below.
1. Financial Reporting is the measuring device responsible for the financial success of your business.
Proper record keeping is essential not only for compliance, but in order to capture the data necessary to support business decisions. If records are kept only for compliance, you are certainly missing out on key business insights to help with profitability and efficiency.
2. Compliance - This is simply the right to play ball.
Your objective from a compliance perspective is to maintain compliance as efficiently and inexpensively as is humanly possible. This is not a value-add, just a tick box.
3. Analysis - Capturing and analyzing the data in appropriate ways is necessary for decision making, and the quality of decisions determines the success of your company.
It really is that simple. Identifying signals through the noise is always a challenge.
A good CFO will build systems and processes to capture the relevant data, and help to determine the appropriate measures to get at the core of your business and make it better, faster, stronger.
4. The less friction in your business processes, the more efficient and effective, and ultimately profitable your company can be.
Business processes are the mechanisms by which information, money, and product moves throughout the organization, ultimately supporting the success of the company. Efficient and effective business processes can help increase margins, improve data, and maintain compliance.
5. Treasury Management: What do you do with your money to protect it?
So, you have worked incredibly hard, made great decisions, found product market fit, and even made a couple bucks. Protecting, and ultimately growing those bucks is what treasury management is all about. You have no doubt heard of the inflation challenges across the world, low interest rates, market corrections etc. Treasury Management is another area where a good CFO can, not only help you maximize the funds you earn, but also to protect their value once you have.
One of the big challenges for small business is accessing the valuable knowledge and expertise of these professionals is, that CFO’s, or at least fully qualified ones tend to be expensive, and are often limited to medium/large organizations where the value can be fully obtained from the salary commitment and associated investments. The good news is with JE&Co, you can reap these benefits before you’re big enough to hire one full time. Reach out and book a consultation, and see how we can help you make your business a success.
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