Every major company with an executive committee has a CFO. The CFO plays a big part in the organisation as he is the one that handles the financial aspect of the company. He should have the knowledge about the company’s cash flow, its assets and liabilities, financial records, budgetary control, investments and shares among other things. It may sound simple but before the CFO can report back to the executive committee if the company is making money or losing it, he has to go through the different departments of the company that deal with the finances such as the sales, finance and accounting departments. Depending on the size of the company, the CFO will have varied scope of responsibilities and range of departments which he supervises to make sure that he will be able to give a transparent, precise and truthful report of the company’s financial status.
Strategic planning is a process wherein the company will allocate its resources and focus its priority in creating a strategy that will meet the company’s set goals according to its mission and vision or its future plans of evolving or expanding. This might involve change in processes or plans to make the operations of the company more efficient or improve the overall status of the company. The main focus is to make sure that everyone in the company and its stakeholders are focused towards common goals and there are a set of realistic and feasible results or expectations that could lead the company to being a better one. That way, once the strategic plan has been set and implemented, the success of it can be easily evaluated.
In this process, the Chief Financial Officer (CFO) of a company plays a big role. As such, the CFO has a big part in the strategic planning of the company because it is him who will make major decisions where the company’s financial resources will be utilised to make it profitable for the organisation. He will give the information on the plan to the Board, its development process and how the plan would be monitored of its faults or areas that need change or improvement. This will include deciding where to invest money or provide start-up capital if the company is interested in new ventures.
Also, because of his financial information, he can determine how much budget will be assigned to any department or project of the company and how this budget will be controlled to make sure that it is efficiently used. The projected profit of the products or services offered by the company and how much time it will take for that investment to be profitable are also concerns of the CFO especially if the company is going to implement a strategic plan that will deal with a new venture or product.
The CFO is an important part of drafting the strategic plan as he has access to the financial information of the company as well as expertise with analysing the process by which the quality and feasibility of the plan can be evaluated. He should be involved in both the planning and...