Questions for business owners/executives/professionals
What do you expect from a CFO? In another word, what kind of CFO is an excellent CFO both in normal operation situation and in a process of going public.
I am quite familiar with the CFO role for listing process which mainly includes:
- restructure the whole organization and business to make it simple and competitive and fulfill the requirement of merge accounting;
- prepare and finalize the staff option scheme
- ensure internal controls over financial reporting are effective and in place to comply with Sox requirement;
- ensure the financial information is fairly stated in accordance with either HGAAP/USGAAP/IFRS and listing rules
- coordinate with all parties, including external auditor, joint book runners, lawyers and valuer, etc and solve relevant issues arising during the course;
- ensure F1 is well prepared and follow up comments issued by SEC until being listed.
- handle investor relationships, especially for involvement in share price negotiation and determination
- do road show
However, as I have been working as either an external auditor or consultant, I am not really sit in a CFO role in a commercial firm. I am not so familiar of a CFO’s role in normal operation. What I can think of may include:
- ensure daily booking and monthly/quarterly/annual reporting is prepared properly and timely, which could be addressed by a sound internal control system once established;
- tax compliance;
- financing and cash flow management;
- budget management;
- act as a decision maker in operating activities from finance and accounting aspect.
- training
The above is what I have some ideas.
From your opinions, what do you think a CFO should pay attention to, or in another word, what are the challenges for a CFO?
This is a question in my mind now. I am thinking of posting this in forum while it seems to be too specialized and boring to most members. So I raise this question in blog section.
If any of you can share with me your opinions, it will be very appreciated!
Thanks a lot for your input in advance!
Views: 2
Comment
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Comment by Wandering Cat on May 30, 2011 at 10:16pm
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@GrandPa, you are such a nice person.
@CB, you are right. While I just feel more comfortable to post it here. :)
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Comment by GrandPa on May 30, 2011 at 9:55pm -
Thank you my dear, it is my pleasure to of what help I can.
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Comment by Coffee Break on May 30, 2011 at 9:15pm -
you can post here too but still forum is the right place because people can reply eachother. Blog is most likely for something personal issues..
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@CB, where is a right section? the forum? Most members have no interest in this topic. You know, to them finance and accounting are boring. And I think in blog section, we can post anything as we wish. Am I wrong?
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Comment by Coffee Break on May 30, 2011 at 8:54pm
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wrong section
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I know keeping information confidential is a must. In fact, I am often required to sign NDA. Of course, signing NDA is just a form. Should keep this in mind is the key.
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I can not help loving you GrandPa! I would like to buy you drink or meal one day when you have time.
What you said I should have known while I just can not express it in a simple, clear and precise way like you did and missed some key points, like management information. I need to learn to think and work from a business aspect rather than only from a professional angle.
And a million thanks to your constructive opinion. :)
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Comment by GrandPa on May 30, 2011 at 8:15pm
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I would add another aspect which is not spoken of, but is very important to the CEO. One of the most important traits of a good CFO, is that they know how to keep information confidential. This is so critical. The CFO knows the dirt, they know were the bodies are buried...and they better know how to keep their mouths shut.
I am not speaking of illegal issues.
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Comment by GrandPa on May 30, 2011 at 8:07pm
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I would phrase it differently, but that is mostly just a style issue. Here would be my list:
1. Accounting system, which is compliant with regulations, and which supplies both financial and management information needed.
2. Internal Controls
3. Tax compliance
4. Tax strategies to take advantage of legal methods of tax reduction
5. Cash Flow Management
6. Accounts Receivable and Accounts Payable management
7. Budgets, operational and capital
8. Find funding if needed and manage relationships with banks or other sources of funding
9. In some cases is responsible for managing compliance with OSHA, EPA, HR or other regulatory agencies, but this depends on each company.
The most important, is to use all of the above to advise the CEO on how the company can maximize profits with the sales and gross profit margin as projected by the CEO.
Honestly, most business owners or CEOs would consider a CFO's job is to advise them on how to legally maximize profit and increase cash flow. That is what the want.
I have been one, and I can tell you that to me, it all is summarized by the concept of making profit and creating cash. That was my job!
The other, unspoken duty, and even though no CEO will admit it, but all want it, is for the CFO to keep the CEO from bankrupting the company. What I mean is that most CEO are entrepreneurs. They are aggressive by nature. They attack. The CFO is there to advice them on when...they might be getting into trouble. ,
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