Importance of A Finance Officer In The Success Of A Business
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As with any position, there are individuals that do not fulfill their responsibilities to their organization effectively and efficiently. In the case of the finance officer, this can be very detrimental to the success of your business.
There is an assumption within society that because someone has a job title such as accountant or treasurer that they have important functions within an organization. This assumption is false!
The individual who assumes this position doesn’t understand what their specific role is so they assume that since they hold one of those titles then they must perform one of those functions.
Sadly, it seems like more and more employers agree with this theory as most positions now require only a degree rather than requiring a professional certification. More often than not, people without these certifications are given the same pay grade as people with them.
As such, the responsibility gets shifted onto others to make sure everything runs smoothly. This can cause additional stress for already overworked professionals and may even create chaos at times.
It is crucial that every employee understands his or her job beyond just the title. What each person contributes to the overall success of the company needs to be identified and appreciated.
They are also responsible for financial reports and the presentation of these reports
As you can see, there is quite an amount of work that goes into creating effective internal reports. Even more important than what content you include in those reports is how you present them to everyone else.
As finance officers, your job is mostly about giving accurate information to make sure that people have enough info they need to do their jobs. This includes telling managers whether or not they have enough money to meet budget goals, answering questions about why some expenses seem high (or low) compared to last year, and making sure that employees know who to go to if they need help with funding an initiative.
Internal reporting is a key part of this process. Not only do they have to give clear and concise answers, but they must do so effectively as well. If someone is looking at a report and getting lots of red flags, it may be hard for them to put things together and determine if something seems off-base.
This could hurt both the employee’s confidence in the organization and the company’s chances of finding the solutions it needs.
They are also responsible for the company’s spending and saving
As you can see, finance is a very important position within any business. Not only do they manage the money that comes into the organization, but they keep an eye out for potential red flags as well.
They look at all of the different cost centers in the business and make sure none of them overspend or under-buy. This includes things like marketing, production, and sales.
Marketing and production need raw materials and equipment, while sales need consultants to help grow their team. All three of these departments bring in revenue for your company, so making sure everything is being spent properly is very important.
If there are ever questions about how much something costs or whether it is budgeted correctly, the person in charge of those resources will know what to do.
They are also responsible for the company’s income and expenses
As you can see, finance is a very broad area that includes things like accounting, budgets, forecasting revenue and costs, developing new products or services, etc. All these functions play an important role in ensuring that your business will remain successful.
As such, the position of finance officer comes with many different responsibilities. Some employers expect their FO to handle accounts payable, which means he or she must be familiar with how companies pay for goods they sell. Others may ask about potential cost-cutting opportunities, as well as what steps could be taken if there were to be a budget cut.
A third responsibility would be helping prepare financial statements and reports, such as earnings statements and balance sheets.
They are also responsible for the company’s assets and liabilities
Beyond ensuring that the owners have enough money to meet their obligations, the finance officer should be aware of how much money is available to the business.
This includes knowing whether or not the business has enough cash on hand to pay its bills for the next two weeks. It also means making sure that there is enough money in the bank account to cover any potential financial commitments that may arise.
In addition to managing the companies’ finances, the finance officer must be familiar with the businesses’ long-term as well as short-term debt obligations. This includes credit cards, loans, and mortgages that could potentially go into default if not paid off soon.
The finance officer also has to make sure that no ethical violations take place through misuse of corporate resources for personal gain.
They are also responsible for the company’s marketing
While every other department looks out for the success of their own product or service, the finance department is focused on making sure that the rest of the business has enough resources to succeed. This includes things like advertising, marketing strategies, fundraising, and more.
Marketing is one of the most important functions of an FO because it is their job to get people to come into your business!
If you want your business to grow, then they must be successful at this. Luckily, there are some very simple ways to start developing a marketable brand and promoting your business.
You can read our article here: Tips To Become More Productive With Marketing And Promotion. It contains several tips from us as well as others who have done similar projects to make sure everything runs smoothly.
They are also responsible for the company’s human resources
As mentioned before, the finance officer is directly connected to the CEO or owner of the business. This means that they must have full confidence in the top leader so that they can give their best recommendations concerning budgeting and profitability.
The finance department works with both internal and external parties as well. These include vendors and employees of the firm, as well as investors looking to invest in the company. All these individuals play an integral role in the success of the enterprise, and the FO has the job of ensuring that everyone is working together effectively and efficiently.
They make sure that all departments are communicating and sharing information, and that people are talking about the same things within the organization. At the same time, they keep track of what goods and services each team needs to do their jobs properly, and makes sure those supplies are readily available.
Overall, the finance officer keeps an eye on how much money the company has at any given moment. Because they work closely with suppliers and outside companies, they make sure that everything is paid for fully and correctly. When something comes up, they find ways to pay for it!
What? You mean I have to spend extra money?! Absolutely not! That will never happen here.
They are also responsible for the company’s policies
As you can see from what has been discussed so far, finance officers play an integral part in ensuring that your business is running smoothly. Not only do they oversee the money coming into the organization, but they create and implement internal policies as well.
Policies are very important parts of any business. You need to have clear guidelines set up before people enter the workplace to ensure that everyone knows how things should be done. This prevents confusion and wasted time later.
Internal policy examples include defining who gets overtime pay and when, what day financial reports will be given, and if there will be a meeting this week or not. All these small things make a big difference within an organization.
Without them, people would be unsure about everything and no one would get anything done properly. Policies must be clearly defined and understood by all employees. If someone comes into work without knowing what is going on, it could hurt the team.
They are also responsible for the company’s future plans
As mentioned before, the finance officer is directly involved in the success or failure of the business. This means that they not only make sure the company has enough money to meet its current obligations, but also have discussions about what steps should be taken to ensure the company can stay afloat for the long term.
The finance department usually brings up these discussion points after the executive team comes up with ideas such as expanding production, developing new products, or moving into more competitive markets.