Hiring a good Chief Financial Officer (CFO) can change nearly everything about your company operations. Here are a few ways companies can optimize their CFOs use and create greater value for their companies:
First, consider funding and capital structure. CFOs must determine the best capital structure for the company that minimizes the weighted average cost of capital. In doing this they also have to maintain financial flexibility.
CFOs can also move the needle by managing strategic liquidity. By quantifying the cash required to increase your company’s resilience and opportunity they can create more value for your company. This will increase the return on capital by investments, deleveraging, dividends, and less banking charges.
In order to increase long-term returns on investment, CFOs can adjust capital allocation based on risk. If your CFO continuously evaluates investment opportunities and potential mergers and acquisitions while also considering the overall risk of these opportunities, it will help your company considerably.
In order to manage risk when it comes to foreign exchange rates and domestic interest rates, CFOs must optimize hedging through increasing hedge effectiveness and redefining the appetite for risk in these particular situations.
Lastly, CFOs can create greater value in your business by considering your commodities. If you use commodities as an income-generating asset, your CFO should be improving the performance of these commodities through designing, implementing, and managing the risk for profit-generating strategies.
As you continue to create value within your organization’s accounting functions, consider the responsibilities of your CFO. How can you optimize your financial management to create greater success? At TGG, we offer top of the line outsourced CFO services that will help increase your value as a company and run your business more effectively. Contact us for your free 15-minute evaluation!