The Role of a CFO: motivating people, managing assets and hedging risks - страница 5

Thus, the first financial block within the company management system to be explored is financial and operational reporting for decision-making by both external and internal users. This encompasses tax reporting for government authorities and consolidated reporting per international standards. The latter is essential for internal users (management and shareholders) and external users (tax authorities, potential investors, banks, and other interested parties) alike.

The second block involves asset management in a broad sense, encompassing the management of available internal and external resources, process organization, and business efficiency improvement. Asset management extends to activities such as optimal supplier selection. Furthermore, in recent years, possessing a strong banking history has become a highly valuable asset, particularly for international business operations and ownership of companies in multiple countries. Opening and maintaining bank accounts in the modern, fragmented, and sanction-limited banking landscape demands considerable expertise and sustained investment in relationships.

Lastly among the key financial leadership tasks is risk management: establishing internal controls to enhance business efficiency and mitigate situations where employees abuse their authority, whether intentionally or inadvertently. This includes the classic understanding of the control environment outlined in manuals for international financial reporting standards: corporate-level controls, information system controls (or IT controls), as well as financial controls.

Together, these delineated blocks constitute a complex network of interconnected elements of financial management. Ensuring proper process configuration, facilitating information exchanges, synchronizing participant actions, and implementing timely and adequate automation – these are all hallmarks of competent financial management and serve as essential prerequisites for the development of any business, whether they are commercial or non-commercial ventures.

In practice, the financial function seldom evolves at a pace commensurate with business growth. Typically, management and corresponding process development struggle to keep pace with core production process expansion. This discrepancy is not due to a lack of motivation on the part of financial leaders but rather stems from the residual resource allocation principle. However, this phenomenon extends beyond finances and applies to all service (non-core) functions for businesses. Nonetheless, neglecting the aforementioned aspects, whether deliberately or due to lack of knowledge, underinvestment in infrastructure, process construction and automation, as well as in financial department resources, significantly heightens business risks, often culminating in bankruptcies.