A Chief Financial Officer or CFO is a senior executive in charge of overseeing a company’s finances. As a member of the c-suite (the highest-ranking decision-makers in an organization), the CFO is expected to take a range of responsibilities focused on the company’s financial health and growth, including financial planning and analysis, monitoring revenues and expenses, managing and tracking liquid assets, reviewing reports on financial performance, assessing investments, and analyzing the overall state of the company’s finances.
What are the responsibilities of a CFO?
As finance is the life-blood of a business, the CFO is a critical piece of the company’s executive team, answering to the Chief Executive Officer. For publicly held companies, the CFO is also answerable to the company’s board of directors.
As the top decision-maker on finance, a CFO’s responsibilities include:
- Report to the Chief Executive Officer (CEO), providing crucial inputs in managing the company’s resources, investments, and capital structure;
- Offer insights on revenue forecasting, cost-benefit analysis, and sourcing of funds;
- Manage the finance and accounting divisions to ensure data accuracy in their reports;
- Handle financial planning, financial analysis, cash flow, taxation, and other finance-related tasks.
- Planning, analysis, and management of an organization’s overall financial health;
- Manage the crafting of budget and coordinate with banks and other financial partners;
- Ensure that all financial reports strictly comply with accounting standards and that there are no fraudulent activities in the company;
- Report and disclose accurate financial information since business decisions must be based on correct data; and
- Adhere to government regulations like the Sarbanes-Oxley Act, as government regulatory bodies expect that companies adhere to the integrity of information they submit.
How is the CFO related to the CEO?
The CFO is a key executive position that works closely with the CEO and the Chief Operating Officer (COO). The CFO might influence the CEO in developing and executing the company’s vision and strategies, offering financial advice on the company’s investments, expenditures, and projected revenues.
What are the qualifications of a CFO?
In addition to years of proven experience in the financial industry, most CFOs have advanced academic degrees and professional backgrounds in economics, accounting, finance, investment banking, or financial analysis.
How does a company benefit from a CFO?
CFOs work with the CEO and other top company executives to steer the company in the right direction based on their knowledge and good judgment. The CEO’s vision for the company becomes more realistic and achievable when initiatives are aligned with financial realities, and undertaken with a clear understanding of the financial implications on the company’s financial health and progress.