Better roles for finance professionals in organizations
To understand the financial situation of your organization, you will need to consult with the CFO of that organization as he is the right person to manage your organization’s numbers day in and day out. The financial professional of a company is your go-to person who keeps you informed about the financial health of that company. Read on to find out what roles a finance professional performs and the types of finance professionals in an organization.
Types of finance professionals
Head of Finance
CFOs take care of the financial aspects of the organization, from planning and analysis, to reporting and risk management, everything they do. Financial managers have a vital role to play in the financial decision making of the organization.
Controllers primarily perform reporting activities such as preparing financial statements and various analytical reports to forecast the financial needs of the organization.
Cash managers look after the capital needs of the organization to ensure that activities are carried out as planned in the budgeted plan. Raising capital and carrying out investment activities are also functions performed by treasurers.
Roles exercised by finance professionals
Simply put, finance professionals actively participate in and manage the financial side of the organization. While specific organizations will have separate finance professionals to perform the functions individually, others will have only one finance manager who will handle the following activities.
Financial planning and analysis
CFOs plan financial activities and analyze details and information to understand how to plan the organization’s financial activities, taking into account economic conditions. Financial activities such as budgeting, financial planning, financial modeling and performance reporting are included, performed by financial managers.
Raise and allocate funds
Raising funds for the organization and allocating them in the best possible way is a crucial task. Financial Directors make decisions to raise funds through equity or loans. Funds raised are allocated for the purposes for which they were raised, such as operational and growth and expansion activities.
Financial decision and control
Considering various financial analyzes and activities of the organization, finance professionals make essential financial decisions. They also exercise control over the financial side of the business to ensure that operational and other activities run smoothly in the organization.
Cash flow management
Meeting cash flow and working capital requirements is essential to keep the business running smoothly. CFOs play a critical role in managing accounts payable and receivable to meet cash flow needs. These professionals also work closely with various department heads to understand working capital needs.
The management and mitigation of organizational risk is the function of financial managers. They analyze possible threats to the financial management of the company, examine the weaknesses of the organization to achieve results and develop plans, and take the necessary actions to mitigate these risks. Typically, they perform a SWOT analysis to assess the risks associated with the organization.
Financial statements reflect the activities of the organization and explain how the past year has gone for the business financially. Finance professionals prepare financial statements and reports for company management, auditors and stakeholders by adhering to accounting standards and rules applicable to the organization.
In short, finance professionals work closely with CEOs and the board to ensure that the financial health of the organization is maintained throughout. The roles and responsibilities mentioned above are inclusive but not exhaustive. They represent the most important roles and tasks performed by finance professionals.