Pop quiz. Imagine you’re the Chief Financial Officer of your company. You have two immediate advisors and assistants - your company’s treasurer and your finance controller. Suddenly, a crisis. Out of time and options, you turn to your two trusted advisors. We’ve already clarified the differences between a treasurer and a controller in an earlier blog post, and now it’s time to put their merits to the test.
Who among the two should you ask to assist you?
Here are 5 possible crises that a CFO could face, and who would be the ideal person to help them tackle the job.
Crisis 1: Your company’s strategy failed.
This is already pretty serious as a crisis, but it gains a whole new level of severity once you talk finances. On the money side, a failed strategy can have consequences that can range from restarting a marketing campaign to having to restructure the entire projected timeframe for your business. Costly, inefficient, and critical - all factors that need fast and sure answers, and you’re already losing money.
Who do you call? Your financial controller. As one of the de-facto heads of accounting within your company, they’re exposed to more data that could help you formulate a quick decision about your next move. Aside from their monitoring of your internal controls, they also play a key part in preparing a budget moving forward.
Crisis 2: There’s a serious error in your bookkeeping - your employees aren’t receiving the pay they should.
This is actually a common headache for CFOs to encounter. Whether due to human error or machine malfunction, there will be cases when your payroll won’t be processed on time. The ramifications for this are grave: your company is legally bound to give salaries on time and properly compensate your employees. Failure to do so will lower employee morale, and repeat incidences could merit a potential lawsuit.
Who do you call? Your financial controller. Aside from being in charge of your budget, your financial controllers are also responsible for preparing internal company finances such as income statements. Ensuring that you comply with regulations and deadlines is their job.
Crisis 3: The president of your country has just implemented a new economic program that might affect your business. Your investors are nervous and need reassurance that their interests will be protected.
Current events will shake up the industry that you operate in, and this situation is becoming more common as the years go by. Investors are right to be concerned about events that could affect their stake in your company, and will often ask for proof that you are keeping their bests interests at heart.
Who do you call? Your treasurer. One of the primary roles of your company treasurer is to interact with shareholders and investors. As the person in charge of your financial goals, they have access to data that can be used to reassure your shareholders that you are well-equipped to handle shifting trends in the industry.
Crisis 4: A rare opportunity has arisen for your company to overtake the leader in your industry - but you need a large amount of capital to get started.
There are moments where a key player in business is suddenly taken out of the equation - whether it be by dissolution, buyout, company merger or shifting industries. While few and far in between, it is not uncommon for companies to vie for the market share that they left behind.
Who do you call? Your treasurer. As the protector of your company from risks or strategies that your business will go through, your treasurer’s skill in cash management is best when looking to consult for capital provision. Their contacts with your local banks will serve you well in this regard, in addition to being able to communicate your intentions to your shareholders.
Crisis 5: You’re currently keeping an eye on the developments in your industry. After analysing the incoming trends, you decide on a different set of goals for your company to follow in order to keep your place in the economy.
Crafting a new internal control is always a rigorous task. Transitioning from one to another is even more challenging, since you have to keep operations running smoothly while shifting, as well as reaching for your new goals.
Who do you call? Your financial controller. Financial controllers are experts at analyzing financial data, leading to their command over your budget - two things that are integral to your succeeding actions. Aside from that, their attention to compliance will make such huge shifts an easier task to coordinate with your local government.
Those five scenarios notwithstanding, it’s always a good idea to get the opinion of all of your advisors, and not simply rely on your treasurer or financial controller alone. If the best solution is one that comes out of a good idea, then it can’t hurt to get as many good ideas as you can before you make a decision.
Do you have any more questions about how your company finances itself? Schedule a consultation with our experts today!