Our firm believes that every company, regardless of its size, needs a CFO. Below are three major reasons why a Chief Financial Officer is an indispensable part of the management team.
- Objectivity– This is perhaps the most valuable reason every company needs a CFO. A CEO needs clear, objective, advice especially when it comes to the financial implications of major decisions. An objective CFO will give that valuable advice to the CEO in all situations.
- A Relentless Focus on Cash– A CFO understands that no cash means no business. A CFO also understands that a shortage of cash needed at critical times will stunt the growth of a business and result in major lost opportunities. A CFO will spend considerable time focusing on future cash flow so the company can take corrective action in advance. A CFO will build relationships with bankers and other lenders in order to assist the company he serves obtain cash when it is needed.
- Financial Information that is Used– A CFO structures and uses past and current financial information so the CEO can make prudent business decisions. Timely and accurate financial statements are extremely important to every company. However, they only reflect what has already occurred. The real treasure that can be gleaned from this financial information is to know what it tells the CEO in order to make intelligent decisions about things such as product or service pricing, the true break-even sales, or the proper financial goals to set in order to measure success.
Every company can benefit from a CFO.