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Professional Business Advisor

Becoming a CFO

CFO stands for Chief Financial Officer and many of the larger businesses have them, not only to ensure that their accounts are in order but also to give financial advice and recommendations. Although most business owners and even Chief Executive Officers (CEOs) can understand accounts as far as the profits and losses are concerned, not so many can understand the full contents of what a financial report may mean and so rely on their CFOs to interpret the finer points. The CFO of course, as originally an accountant themselves and still responsible for the correct accounting procedures within a company, can fully understand them but perhaps more important than that, can identify financial trends. Although most financial statements may have peaks and troughs, it is the reason for those peaks and troughs which all too often CEOs miss and that can be crucial in the success or failure of a company to make profits. AS the CFO of a company is often chosen for their knowledge of the business the company is in as well as their accounting abilities, a CFO is generally well placed to not only recognize any peaks and troughs but also often able to match them to certain business activities that may have changed at those times. One CFO that has proven quite adept at this is Maureen O’Connell, the CFO for Scholastic, an American Publishing Corporation. You will see though from Maureen’s profile that she was well suited for this position before she was awarded it. Scholastic as mentioned, is a publishing corporation and as Maureen had had experience as a CFO for both Publishers Clearing House and Barnes and Noble, her qualifications could not have been more perfect. This however is not the case for many accountants that try to step up to be CFOs and so often the best they can hope for is to be the head of accounting departments. Usually the head of an accounting department will report to the CFO who is in fact responsible for all accounting but usually delegates this part of their responsibilities in order to spend more time on other thing. Their other responsibilities are of course to study the accounts and look for peaks and troughs and then associate them with an aspect of the business which may have been responsible for them. By doing this, the CFO can advise the CEO as to where potential problems may lie in the future of the business, allowing them to avoid troughs in the future and make the most of any potential peaks also in the future. If the CEO is considering any expansions, the CFO should also be able to advise them on how much money is available for those expansions and possibly which area an expansion may be most profitable. It is therefore the CFO and not the CEO that dictates which direction the company heads in the following few months, a responsibility that many accountants may not wish to have on their shoulders.

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