My Role as A CFO

My Role as a CFO

Bob Cockrell, CPA

This list is not all-inclusive, but does cover the typical tasks performed on most CFO engagements.  Occasionally, the owner may have become comfortable with one or more of the following tasks and have no desire to delegate them.  And some companies have no need for certain services.  As a general rule however, most if not all of these functions end up on my task list as Chief Financial Officer.  While some of these are not strictly financial, they are typically found under the direction of the CFO in many sizes and types of organizations.  Even large publicly-traded companies will have accounting, treasury, human resources and information technology functions all report through a Chief Financial Officer.  In larger companies the title may be Executive Vice President or some such, but titles are not the key – Ability to produce results is the only thing that counts.

A good Chief Executive Officer will learn to trust and rely upon the people that report to her or him.  S/he will also learn to ask questions and be kept informed about key issues.  Perhaps the most important role of the CFO is to serve as an advisor and confidant of the CEO.  To gather information, condense it to key issues, and be sure that the CEO knows where their personal focus will have the most impact.

I personally have significant or substantial experience with all of the functions listed below.

Treasury – Cash Management

Forecast cash requirements and expected cash flows weekly, monthly or daily.

Help evaluate the impact of choices about the use of cash.

Manage the bank line of credit.

Invest excess cash on a short-term basis.

Make sure we always have adequate cash resources for critical needs such as payroll.

Relationships with Bankers

Negotiate terms of loans: interest rate, fees, repayment terms, collateral and guarantees, protect owners’ personal assets from unreasonable requests by lenders.

Negotiate better arrangements when needed.  Extensive knowledge of various lending methods and an in-depth understanding of a lender’s needs allow me to develop innovative solutions.

Report financial & operating results to lenders and keep them excited & interested in us as a customer.

Relationships with Suppliers

Negotiate arrangements regarding payment if not within terms

Negotiate special terms for seasonal purchases

Manage vendor relationships – compare benefits vs. risks of having a sole supplier for key products and services, vs. having two suppliers share a product line.

Risk Management – Property & Casualty Insurance, including Workers’ Compensation

Determine appropriate coverage for anticipated risks

Compare rates and coverage with alternate carriers

Make sure we have the best rates available – special industry terms, etc.

Health Insurance and Other Benefits

     Evaluate cost vs. employee benefits – find cost-effective way to ensure that employees have good coverage, benefits are better than competition (for employees), and that costs will be manageable at all times.  If possible, explore alternative concepts: MSA, industry trade group plans, etc.

Financial Reporting

Advise owners about pros & cons of various accounting options.  For example, many business owners manage financial statements to reduce taxes (always a worthy goal), but frequently do so in ways that make the balance sheet unattractive to bankers.

Teach department managers about financial activities.  Help them understand how their daily activities impact the financial results of the company as a whole.  Help develop the team work that makes a company really function effectively because everyone is rowing in the same direction.

Develop a planning process:  Long range strategic planning, annual budgeting and forecasting, and monthly or weekly planning to ensure that the team is communicating effectively and working as a team rather than as independent forces.

Supervise the financial reporting process; ensure that the financial statements provide timely, useful information to every manager that needs to know (internal) and for all external stakeholders (lenders, minority shareholders, etc.


Supervise, enhance and ensure efficient operations of billing, payables, payroll and inventory management functions.

Manage Information Technology Infrastructure

     Design internal network, external communications access, hardware and software to provide cost-effective tools to help the business grow.  Look for new technologies that will help the company to provide better customer service, have better information and still control costs.  Listen to users’ needs and be responsive.  Manage IT resources to keep technology current: avoid the need to replace a lot of hardware & software all at once, while ensuring that each component purchased will fit the long-term strategy and have a reasonable useful life.  My previous technology experience and broad business background enable me to significantly improve the communication between the owner and the technology suppliers, who generally speak different languages.

Capital Expenditures

Evaluate lease or purchase of new equipment.

Balance needs for production capacity upgrades with capital requirements, tax advantages and owners’ abilities to support needs for additional capital.

Assist in forecasting the efficiency improvements, productivity yields or other cost savings (or other cost impacts) of additional equipment.

Contract or lease negotiations.

Human Resources

Manage human resources policies and procedures.

Help owners establish and maintain employment policies and practices.

Coach business owners and other managers on supervisory techniques, how to develop employees, how to motivate, and if necessary, discipline people, how to develop training and career development programs.

Design and implement employee benefit programs.

Monitor employee retention and do our best to improve it.  Make sure we have the right people on the bus, in the right seats and aren’t carrying any free riders.

Manage training efforts; make sure our people are staying current, learning and growing.  Not only for the skills they bring to the company, but to give them more challenge and job satisfaction, to retain the good people.

Pricing and Costs

Evaluate pricing and its impact on profitability.  Understanding costs such as fixed costs versus variable costs and the impact of volume on profits.  Manage the allocation of overhead or indirect costs to specific product lines, and teach how allocation assumptions can result in misleading or erroneous conclusions about the profitability of specific products.

Operations Analysis and Process Management

This is the never-ending search for better ways to serve customers, keep employees fulfilled and provide more fun while improving the financial and intrinsic rewards to the owners and other stakeholders.  Evaluate what we are doing; be alert to needs of customers, employees, outside stakeholders and owners; create new and better ways to accomplish our mission.

Internal Controls

Ensure that controls are in place to protect assets and ensure that information is accurate and timely.  Reduce the opportunities for theft, fraud or defalcation.

Strategic Planning

Develop the companies Mission Statement, Objectives Goals & Strategies.  Ensure that every employee is aware of the company’s goals, and that each understands how their efforts contribute to those goals.  Adapt as the world changes.  Evaluate performance against goals and critique.  Revise and do it again.  Keep an appropriate focus on the long-term goals while we make things happen every day, to make sure those things we do each day will take us in the right direction.

Credit and Collections

Design and implement policies and procedures to improve collections from customers.  Screen out no-pay risks before granting credit; monitor receivables to identify issues sooner; collect slow-pays faster.


Monitor filing deadlines for income tax, sales & use tax, corporate registration, business licenses, and all other regulatory requirements.

Tax planning – reduce potential liabilities by careful application of every possible tax advantage.

Growth Strategies

Should we expand facilities? Should we have two shifts? Should we acquire another company, or expanded capabilities?  A good CFO is asking these types of questions and listening to the owners to help them answer their questions.