When it comes to your business, the bottom line is always going to be profit. And to understand profit, you have to look at all of your finances. But, after you’ve grown your business to a certain point, who is really controlling those finances? You may have had a very good idea when you were the sole proprietor of a business idea, but as the concept has expanded, you can very quickly lose track of revenue and expenses. Depending on the size of your company, this realization may come sooner than later.
So, within the construct of your current business environment, who is in charge of controlling the finances? There is a chief financial officer to consider. There is someone who is known as the Comptroller. And, to a degree, the board of directors of a company will also have a dynamic say into how finances are used. Again, this is all context-based, and the size of a company has a great deal of influence.
Even in a small business, there is going to be someone designated as the chief financial officer. This is the person who is in charge of the money. Their primary purpose in that role is to understand where the money is coming from and where the money is going. They handle the part of the business plan that recognizes all of the revenue and expenses that go into day-to-day operations and long-term endeavors. Without someone in a CFO role, your profitability will take a big hit because you have no way of analyzing all of the information coming through.
Another essential person when it comes to your business finances is the controller. If you’ve ever wondered what a controller does, you may have to look at larger companies that have one or more people in this position. A controller is essentially the head of a financial Department, and they are the person who reports directly to the CFO. There can be controllers over different departments, and the organizational structure of a particular company or Corporation will determine how many of these people there are and what their specific tasks will be.
The Board of Directors
You may read the news that suggests the power of the board of directors to alter the financial direction of a company. After a company goes public, the board of directors is a group of people who are gathered to represent the interests of the shareholders and other stakeholders. Though in many cases, the work that this board does is not exactly transparent, the time, effort, energy, and resources they bring to a company is invaluable.
There are some issues when a board of directors does not necessarily navigate company policy very well. In those cases, the actual stakeholders in a company can adjust who the board of directors are. The board of directors also can hire and fire different high ranking positions within a company structure. The checks and balances are fascinating.