Elon Musk, Steve Jobs, and Mark Zuckerberg are all household names you’ve probably heard a thousand times. These men all served as the Chief Executive Officer (CEO) of various high-profile companies. While these guys all played a major role in the success of their companies, they didn’t act alone. Behind every great CEO stands a slightly greater and incredibly more handsome accountant. These gorgeous titans of industry proudly emblazon the letters “CFO” on their business cards.
What is a CFO?
The Chief Financial Officer (CFO) is ultimately responsible for all things in the business dealing with finances. Since businesses are run entirely around their finances, this basically means the CFO has responsibilities that touch every aspect of operations. To put everything in perspective, you can think of CEOs as quarterbacks for their company. They handle the ball every down and will oftentimes call the play that is to be run next.
CFOs, on the other hand, are like the head coaches. They are in charge of what plays make it into the playbook while also managing player salaries and recruitment. The CFO is responsible for understanding the organization’s current financial position deeply enough to make detailed reports and projections for what should happen in the future. CFOs need to keep one eye on the past while the other looks towards the future.
The CFO oversees the creation and analysis of all financial reports for the company, keeping a constant finger on the pulsing flow of cash through the organization’s veins. Keeping tabs on past financial trends while also predicting future ebbs and flows allows the CFO to provide the CEO and other executives with the insight necessary for making optimal business decisions with the highest chance for success. Essentially, CFOs must live in the past, present, and future at all times to perform their various roles effectively.
CFOs have what are called “controllership duties”. These duties involve the reporting and analysis of the organization’s financial operations. These reports are created on a regular basis and attempt to collect all relevant data into a digestible format that can be presented to company shareholders, executives, and any other stakeholders, like prospective investors or creditors. The accuracy and detail of these reports are incredibly important as they play a major role in the decision-making process for all business decisions.
The CFO is also responsible for ensuring the business has enough funds on hand for day-to-day operations, prepared for any unforeseen financial events. These duties fall under the purview of what is called “treasury duties”. In performing this role, the CFO manages the capital structure of the organization. This involves balancing the company’s debt, financing, and equity, confirming that operations flow smoothly and everyone has the resources necessary to get their work done. Treasury duties also encompass the management of inventory, accounts payable, and accounts receivable.
We touched on how the CFO is responsible for creating and analyzing reports. These reports allow the CFO to predict (or forecast) future trends and potential changes on the horizon for the industry. Preparing for the future is an integral aspect of being a CFO. The CFO is also in charge of economic strategizing that takes into account the performance of the company’s various products and services. The CFO analyzes this performance to determine what’s working and what isn’t to see if and where changes, cuts, or additions are needed. CFOs take an active role in all of the company’s investments to constantly ensure maximum return on investment (ROI).
As you can see, CFOs can have a massive impact on the success of an organization. This fact is not lost on those who perform the role of CFO, and they often have extravagant salaries that match the importance of their job. There’s no doubting the importance of a knowledgeable and talented CFO, but many small businesses just don’t have space in their budget for hiring one on full time with the salary and benefits expected for the position.
Luckily, there are skilled professionals today who act as virtual CFOs (VCFO) that provide many of the benefits of a full-time CFO at a fraction of the cost and with considerably less commitment required from the organization.
What is a Virtual CFO?
VCFOs are outsourced accountants that can help an organization get and remain on track with their finances. They can perform some or all of the duties of a regular CFO depending on the needs of the company. VCFOs work directly with business owners and CEOs to help them enhance their understanding of their own business and its finances, giving them the insight needed to find success.
A VCFO can, of course, handle all kinds of financial reporting. More than that, VCFOs can help owners get a handle on their cash flow and provide financial planning that will minimize risks and increase ROI. They can help organizations navigate unfamiliar territory and avoid financial mishaps. VCFOs can help owners determine the best timing and positioning for the growth of their business.
The services offered by virtual CFOs are custom-tailored to the needs of each individual business. After all, every organization has different priorities, strengths, and weaknesses. They can help enterprises find and land investors or analyze their operations to find opportunities for increasing efficiency. VCFOs can also help companies manage and reduce their debts while increasing the organization’s profitability.
Ignite Spot Virtual CFO Services
At Ignite Spot, we believe every company deserves to have access to expert accounting services. We want nothing more than for the companies we partner with to find success. Due to this, we offer services like our VCFO Service at an affordable starting rate with no long-term contracts. We have complete faith in our ability to improve your organization’s finances and know that when you do well, so do we.