Chief Financial Officer (CFO) who supports corporate growth from a financial perspective. The role required of CFOs today has changed significantly. As a designer who creates corporate value, he is required to fulfill his traditional financial responsibilities while at the same time contributing to corporate growth and responding to changes in the complex circumstances surrounding management.
What is a CFO?
Recently, the term CFO has finally become widespread in India, but few people have an accurate grasp of its meaning. Many people recognize that the CFO is a term that refers to the director of the finance department, but in reality it is not. The CFO is “another manager” who has a high level of expertise in finance and business management, actively formulates strategies, and promotes business together with the manager.
The difference between the CFO and the finance manager is that the finance department is an indirect department, while the Virtual CFO India is a management team.
The finance department may be knowledgeable about finance, but not good at management strategy. What is happening in the market? What is your position in the market? While the CFO thinks about business strategy, the finance department covers limited areas such as the company’s finance and accounting.
Furthermore, even if the finance department can handle finance and accounting operations, it does not involve other departments to take action for the growth of the company. Even if you carry out a profit and loss calculation for each department, you cannot think about what is the cause of the department with a poor profit margin and how you can improve it.
On the other hand, the CFO, who is the management team, has the job of demonstrating leadership and growing the company. You are required to work with the CEO to face management challenges, which is the difference between the indirect department and management, and the finance department and CFO.
Division of roles between CEO and CFO
The CEO is the Chief Executive Officer. To put it simply, the roles of the CEO and CFO are such that “the CFO is the one who creates the business and makes the sales, and the CFO is the one who makes the funds to make the business.”
CEOs are good at thinking about new strategies, new businesses, and future visions to generate sales. However, there are many people who talk with a concrete sense that sales will increase if this happens, and that the market size should be about this size, but you will need a CFO to obtain an EIN number. There are few CEOs who are good at putting short-term, medium-term, and long-term management into numbers after properly showing the basis of costs and growth rate for sales expansion, and there are times when there is no time to spend.
However, it is difficult to raise funds only with a vision for the future, and without funds, new businesses will not grow. There are many businesses in the world that cannot scale up without successfully communicating profitability and growth to the market. So you need a CFO who is a funding professional.