A Chief Financial Officer or CFO is someone that all or at least most large businesses and corporations have but small businesses often do not have one so what is a CFO and why are they needed. Many people think that a CFO is the person in charge of the business’s accounts and they are but their actual responsibilities are far more diverse than just that. With the CFOs knowledge of accounting and their knowledge of the business the company is in, allows them to advise the Chief Executive Officer (CEO) of how the company stands financially and how they can expect to stand in the future and it is this advice that the CEO will take when planning a company’s future. This is such an important aspect of the CFO”s job that at least one CFO, Maureen O’Connell of Scholastic Inc. an American publisher, has said that CFO should stand for Chief Futures Officer not Chief Financial Officer. You can learn more about Maureen O’Connell at http://maureenoconnell.cfoamerica.org/ but she is perhaps one of the most successful CFOs in the country and has attained the added positions of Executive Vice President and Chief Administration Officer (CAO) with Scholastic. This isn’t the first time that O’Connell has held more than one position at the same time as when at Publisher’s Clearing House in 1998 to 2000, she was both the CFO and an Executive Vice president and when at Barnes and Noble in 2000 until 2002, she was both CFO and CAO. She was even the President and Chief operations Officer at Gartner Inc. from 2003 to 2004.
Obviously with experience with both Publisher’s Clearing House and Barnes and Noble, O’Connell was well versed in how publishing companies operated and was able to put that experience to good knowledge whilst advising the CEO of Scholastic. However due to their experience and qualifications, although a CFO can be very beneficial, they do also demand a high salary and that is why many small businesses do not have one. However, as a business grows and employs more staff, its accounts grow in size and their financial situation becomes more intricate and so the hiring of a CFO is more viable. Once a business is any reasonable size, a good CFO should save that business at least the equivalent of their salary and often much more. They can correctly anticipate the profits or loss of a business well into the future and may be able to advise the CEO or owner into a path the business can take in order to stay profitable. On many occasions, for a business to successfully advance into the future, it will take investment in different areas and it is how much the business can afford to invest which the CFO can advise the owner on. Obviously over investing could lead to financial shortages whilst over investing could lead to wasted money, neither of which is good for any business regardless of its size or financial standing.