Most of the time, business owners think that their Chief Financial Officer (CFO) or their Certified Public Accountant (CPA) only worries about company tax issues and payments. However, your company’s financial needs involve more than taxes. You need a CFO or a CPA to oversee multiple departments and to wear many hats within your organization. By creating harmony within the company’s finance departments, a CFO reduces business risk and increases the functionality of your business.
If you’re using your CFO or your CPA as a tax compliance officer and nothing more, you’re putting your company at risk for financial problems. The person in charge of your company’s fiscal wherewithal should be overseeing the following FOUR departments in your organization, not just one.
As the overseer of the four financial departments, the CFO fills four different roles in your organization.
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Your company needs someone in charge of all financial departments – treasury, tax, accounting, and finance – who can act as a strategist, operator, steward, and catalyst. The CFO must be a balanced individual. He or she must be able to drive up performance while increasing efficiency. That takes balance and skill.
If one person can’t handle all four roles, then you need four different people to step into those roles and one person to oversee the four. Maybe your CPA acts as your steward while your CERTIFIED FINANCIAL PLANNER (CFP) acts as your strategist. Then, maybe your board of directors becomes your company’s steward, and the CFO becomes the catalyst. You, as owner, oversee all directions and departments.
Whether one person or five people handle your company’s financial divisions and direction, your goal is to create an equilibrium where all departments function together. If they do not work together, you will miss compliance regulations, tax liabilities, general ledger issues, or reporting problems. By overseeing all financial divisions and making them work in harmony, the CFO reduces business risk.
Don’t miss our next article in the business finance series: How Much Cash Should You Keep in Your Business and Personal Accounts?