Lets have a look on how CFO Works

??Lets have a look on how CFO Works

Finance is the core of any organization. Businesses large or small require finance for the effective functioning. From purchasing raw material, hiring employees and capital investments funds need to be allocated.? There have been replete instances in the past when organizations had to liquidate because of ineffective handling of funds.?

All this makes the role of a CFO very integral. Chief Finance Officer (CFO), is a part of the top level executive in the organisational hierarchy. The CFO holds the responsibility for overall financial soundness of an organisation. A CFO is at the forefront of business planning, budgeting, forecasting of various finance related activities. CFOs ensure that there is sufficient liquidity in the business, customer payments are made timely and costs are controlled, so that the organisation has enough cash to meet the financial liabilities.For any capital investment made, the organisation would want to have adequate returns to justify the investment, the CFO oversees that the organisation gets adequate return on investment.?

Modern businesses have roles of CFOs more than just the finance function.These days many CFOs manage the company’s risk, M&A activities and few have the responsibility of IT as well. As per McKinsey’s report 4 in 10 CFOs say that they spent most of the time in the past few years on roles besides finance roles. Strategic Leadership, Organisational transformation, big data and analytics were some of the roles the CFOs assumed in the past few years.

The finance function in this modern era is expected to be proactive rather than being reactive. Organizations should not wait for a crisis to occur and then decide the course of action, the finance team is supposed to prepare in advance on its crisis management plans. In the modern world, sustaining organizations historical findings and data is no longer relevant, organisations are expected to use modern technologies to add value. The CFO’s role is now more on value and strategy building, that will help organizations scale greater heights.

With the advent of globalization and the changing realities in a VUCA world, the role of a CFO has been redefined. In the modern world CFOs are required to contribute towards the growth of an organisation. They must be able to leverage the financial position of the organisation to ensure sustained growth.

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