by analyzing and relating operational reports to financial reports, which enables other departments to manage their functions more effectively and thereby create value to the organization. This increases productivity for other departments.
The CFO makes sure that investors get the most out of their investment by maximizing revenue, cutting costs, and raising levels of productivity and efficiency throughout the entire firm.
By ensuring that short-term funds are not used for long-term reasons and that funds are allocated to those projects or sectors of business that optimize return on investment, the CFO plays a very essential role in managing the group’s cash flow successfully. They reduce the cost of capital for raising these funds by establishing and maintaining relationships with banks, financial institutions, and investors. By maximizing the working capital recycle, they effectively manage working capital. After keeping track of the modifications and evaluating their influence on the foreign currency pricing, they choose the appropriate hedging instruments to mitigate the foreign exchange risk.
They make sure that the appropriate internal checks and procedures are in place in each department of the company to identify and reduce risk, as well as to obviate the possibility of fraud and errors. They make sure best practices are used, which includes benchmarking to maximize return on investment.
By ensuring that the right infrastructure is in place, including crucial resources like money, when a firm looks for development through acquisition or mergers, the CFO plays a crucial part in the growth and expansion of the business of the organization.