The chief financial officer of a company (CFO) is, naturally, in charge of the financial elements of a company. As broad as that definition is, the duties of the typical CFO are broader still. If the CEO is a figure similar to a president, the CFO is much like a vice-president – the second in command who is often the gatekeeper between the CEO and the many different problems that can face a company on a daily basis.
A modern CFO has to deal with keeping the company on an even financial keel, and since most businesses are in the business of turning a profit, the entire thing hinges on the duties of the CFO. A daunting prospect, to be sure.
CFOs face a number of problems in the course of their work, including the following 9:
1. It’s A Big Job
Maybe this one problem encapsulates the rest of them. The usual job of the CFO is to oversee the monetary interests of the company, including budgets and forecasts, buying and selling. Very few CFOs have the luxury to focus on the finances, however. As CFO, the second in command is much more likely to get all the problems people don’t want to necessarily bring straight to the CEO, and these problems will often have very little to do with the strictly financial side of the operation. Today’s CFO has to look at the big picture.
2. Good Help Is Hard to Find
Or sometimes good help is easy to find… but not so easy to keep. The days of people staying at one job for decades are over, and today’s workers are always looking for the next opportunity. A single employee can go through many jobs over a lifetime in the search for the perfect job. Consider looking in your own company for someone to fill any vacant positions, or even implementing some programs to educate and build up your younger, less-skilled employees into someone ready to take managerial or specialized responsibilities in the future, so their next opportunity is with you – and your new hire is already someone you know and trust.
3. Finances Are Complicated
CFOs do a lot of things that don’t directly involve finance, but they still have to handle the money side of the company. Today’s increasingly complicated financial systems don’t make this any easier. It’s still about profit and loss, but finding out exactly what those are can be harder than it sounds. Planning and forecasting are key here. Look at the long term, instead. Getting the knack for forecasting so you can reliably plan for the future will really help untangle some of those operational knots.
4. It Can Be a Buyer’s Market
Selling a company is definitely in the CFO’s bailiwick, which can be incredibly exasperating… and more expensive than originally anticipated. It’s not possible to sell a business “as is”. There’s a lot of cleaning and straightening to do to make it an attractive prospect to buyers, and that takes resources. Learn everything about a company before attempting to sell it.
5. The Relationship with the CEO
To be completely fair, a great many organizations have really great CEO/CFO relationships. Not only do they get along well, they can be an inspiration to the rest of the company, promoting the kind of communication that makes any organization work at its very best. That’s not every organization, unfortunately. Many times, planning and following through with the plan, or the lack of one or other, can cause tension between the two top people in the business. Every CFO should not only have a trusting relationship with their CEO, but one in which they feel comfortable discussing the places either one of them needs to shore, or change, their tactics.
6. Irregular Regulations
Even the smallest, most mundane kind of organization has to deal with regulations. These regulations are not only numerous, but they often change, depending upon the current government and current trends in the economy and culture. Since so many of these regulations deal with finance and money, it’s the CFO’s job to keep up with each and every new law.
7. The Ultimate Watchdog
All too many companies have fallen because of bribery, embezzlement, or other issues of corruption. It’s the CFO’s job to spot and investigate any discrepancies and deal with them. It often takes only one person doing the wrong thing to bring the whole organization down – if they are not caught in time.
8. The Pitfalls of IT
IT is literally a necessity of modern business. If you don’t have the right hardware and ERP software, not only will you fall behind, you’ll be unable to do business in the first place. The problem with IT is that it is expensive. Not only do you have to buy pricey components, but pay specialists to implement and maintain it. It is the CFO’s job to find the balance between affordable IT and technology that actually does the best possible job in supporting the work the organization does.
9. Legal Issues
No matter where they originate, lawsuits involving the company can be tremendously draining, financially and in other ways. Keep an eye on any laws that might be relevant in order to avoid any legal entanglements. The right contracts with vendors, contractors, and others necessary to the business can make or break the organization in terms of legal matters. Certainly, if it’s at all possible, be sure to have a legal expert on hand, because one will be needed, more likely than not.