In the most recently reported fiscal year, Google has made more than 181.69 billion dollars in revenue alone. Google consistently grows its cash flow, year over year, making this tech giant the fourth most profitable company on the internet. However, their success is not “luck” or made up of rash decisions. Instead, it comes from calculated strategy, forecasting, and strong business decisions to ensure that they keep growing in the right direction. Most of this comes directly from having a solid CFO leading the company.
What Exactly Is a CFO?
A CFO or Chief financial officer plays a significant role in a company’s operations. They manage everything from strategy and regulations to reporting and financial statements. Some primary chief financial officer responsibilities include:
- Analyzing Financial reports: Part of the CFO’s roles and responsibilities include interpreting data and overseeing financial statements. This is essential to create new strategies or objectives for the company while assessing the progress of current goals. This information is then shared with important decision-makers in these companies, such as CEOs or the board of directors.
- Monitor Finances: One of the primary CFO skills is to be able to read, understand, and analyze financial reports and statements. This is usually done in a team where they put together, produce, and continually watch financial finances.
- Develop Strategy: CFOs need to do more than look at reports and create plans. They also need to develop strategies to ensure companies are always performing at their best.
- Enforce Compliance: If a business is not in compliance, it can end up in a world of financial trouble. One of the CFO skills that are absolutely necessary is understanding the regulations and rules of the industry the business is in. CFO’s will ensure that the business complies with local, state, and federal laws, guaranteeing that the company does not fail, resulting in lawsuits or penalties.
Google’s CFO Plays A Significant Role In Its Success
Google’s CFO, Ruth Porat, attributes part of Google’s financial success due to the active restructuring of the company and strategic acquisitions of more than 200 different companies. However, one of the most important roles she plays is assisting with the planning aspect of the finances at Google.
This includes a quarterly review that monitors every core engineering and product area to see how it has been performing in the last 90 days and what it will do in the next 90 days. She examines the trajectory of the company’s operating metrics and financial models to ensure they’re making money, not losing money. On top of that, she must analyze business models of future projects, using data and facts to ensure they’re investing in a profitable new segment for Google.
What Are The Benefits of Having a CFO?
There are many roles and responsibilities that CFOs will cover in your business. When you have a CFO, they will help with the following:
- Developing an accounting plan that’s tailored specifically for your needs.
- Monitoring expenditures, so you don’t spend more than necessary.
- Preparing financial reports and forecasts to ensure accurate information is being reported for management purposes.
- Managing company budgets in order to create cash flow projections and identify areas where cuts can be made to reduce expenses (like travel).
If you’re not ready for a full-time CFO for your company, many choose to invest in virtual CFO services because they can be hired as needed or for a specific business function. A virtual CFO also has many benefits, including lower costs than hiring someone full time, availability whenever required, no commute or office space needed on your part, and increased flexibility if their services are not currently required but could come in handy at some point down the road.
What are the Essential Background Skills of a CFO?
Finding the right CFO for your company may seem challenging. You can’t just hire anyone to handle your finances because it can make or break your success. When looking to hire your next CFO, there are some essential background skills you should be looking for, including:
- A graduate degree in finance, accountancy, or business administration.
- Experience as an accountant, controller, chief operating officer (COO), director of finance, or other financial management roles.
- Knowledge about current tax regulations.
- Proficiency with accounting software like QuickBooks Pro and Excel spreadsheets to produce accurate reports and analyzes.
- An ability to think strategically concerning the future of a company’s finances while remaining grounded in the day-to-day operations on both large-scale projects and small details such as expense reimbursements for office staff.
This is just a short list of the skills necessary to be a successful CFO, but it should provide you with insight into what qualifications are required when searching for your next hire.
Do I Need a CFO?
Every business needs capital in order to survive. If you’re not managing your money, it can be detrimental to your success. In fact, according to the U.S. Bureau of Labor Statistics, more than 20% of businesses will fail within the first year due to financial issues, with more than 50% failing within five years. Mismanaged financial planning and strategy, forecasting, and maintaining your books can really play a significant role in whether your business thrives or fails.
If you’ve been thinking about hiring a chief financial officer, now is the time to take action. It doesn’t matter if your business has 1 employee or 100; having an expert at the helm of your finances will help you avoid costly mistakes and ensure that you’re complying with all tax regulations.
When it comes to accounting matters, there’s no substitute for experience. A virtual CFO can provide this expertise without taking up any space in your office–or cost as much as an in-person CFO would cost! To find out if this is the right solution for you, click here to learn more about ioogo’s business accounting services today!