The CFO is unofficially agreed upon to be the second most important executive position, not including the owner of the company. Shadowing the chief executive officer, the CFO (chief financial officer) is responsible for making large financial decisions for the company, as well as analyzing the information they find and are given, and lastly they are tasked with the responsibility of informing the CEO with their findings, and their rationale for the analysis. The CFO used to be a far less important job, but with the rapid expansion of the corporate commercial world, they have become fundamental to the decision making of a company.
Years ago, before the cataclysmic commercial boom of twenty first century globalization, the CFO was not a commonly utilized position. They remained usually for the purpose of supervising intricate financial segments that the CEO could not get to, due to rapidly changing company policies or growing profits. As this began to be the case for most of the companies on the verge of the year 2000, there seemed to be a shift in the usability of the chief financial officer. They were slowly, and on average, given control of the complete financial segments of full corporations. In recent years, the CFO has been a very desirable and important executive position.
The first job of the CFO can best be described as approval. As small scale clients and transactions take place, there are always potential financial liabilities, or risks, that have desirable awards. From possible lawsuits to less than credible transactions on account or credit, the chief financial officer decides whether or not to approve the most to least important of these. The CFO wants to increase the financial activity by opening new client relationships, but needs to avoid losses. A badly placed approval that results in a loss will reflect directly to the person holding this executive seat.
Next, the CFO is held accountable for financial planning. The majority of this job is in relation to taxes. A work force of accountants are usually tirelessly calculating accumulated earnings, owed amounts, and interest rates for all sorts of sales, financial, and business taxes. The CFO, in terms of planning, has to have the right accountants doing the right jobs, in the right places, with the right equipment. This, as well as an accurate compilation of their findings, is very important not only for taxes, which can have dire consequences when neglected, but also the basic structural sales patterns of the companies, which sprawl through a considerable amount of corporate and individual clients. The CFO, obviously, cannot be responsible for individual calculations that are handled by accountants, and is instead the decision maker of their positioning and the sources and destinations of their information and analysis of earnings, losses, and the like.
The optional third most important job of a CFO is the analysis of the accountant’s findings. For the chief financial officers that do hold this responsibility (about fifty percent of American CFOs do not) they must do so in a professional and advice based format. Their findings are then reported to the CEO, a step which can partially be considered as the fourth and final job of a CFO. The findings must be concise, because the corporations that do employ a chief financial officer usually do so because the chief executive officer is extremely occupied. Due to this fact, they must have a basic financial outline of their weekly to monthly findings in most cases, which are composed of a few different things. First, the introduction of information must include a short summary of any clear and present problems, or a statement claiming everything is completely on track. Usually, charts of sales income, tax revenue, and similar statistics are to follow the summary, giving the CEO a good idea of the current direction. There is also somewhere on this report that will provide an analysis of the financial findings, giving reason to the advice that is given to the CEO.
The CFO had a dramatic rise to importance at the beginning of the twenty first century, most prominently due to an increase in the workload for the CEOs. To take on the more in depth financial decision making, more corporations hired an executive to take care of the financial spectrum of things. This chief financial officer is less than debatably described as the second most important executive seat. He or she takes on three to four responsibilities, which are crucial to the success of a company.