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Whether you are looking into interviewing for a CFO position for yourself or you’re just curious about what CFO advisory can do in a company, it’s important to know the jobs and duties they have. Knowing the position they hold in the company hierarchy can also give you an idea of the things they are in charge of and who they report to.
This guide will have all the duties of the CFO position as well as the place they have in the company hierarchy to give you a better idea of who they are and what they do.
What is a Chief Financial Officer?
The CFO in a company is someone who is a senior executive who manages all the financial aspects of a company. They mainly focus on financial planning and cash flow. They also look at a company’s strengths and weaknesses when it comes to finances, and they try to make action plans where the company can improve.
They are also in charge of the accounting division, and workers in the accounting department will report to the CFO. They are also tasked with ensuring that all financial reports are accurate and made on time.
In a company, the CFO is the highest financial position that a person can hold, and they are the third highest position in the company. This means they are a vital part of the company in most departments, not just in the financial one.
The Company Hierarchy and the CFO
If you have heard of the term “C suite,” the chief financial officer is a part of this time. The members of the C-suite include the chief executive officer (CEO), the chief operating officer (COO), and the chief information officer (CIO), as well as the CFO.
Before someone can become a CFO, they need to have a large amount of experience in the financial sector. They also need to have experience leading a team of people. Most of the time, a CFO has a master’s degree, and they have extensively studied economics or finance.
They often have a background in many different financial fields, including investment banking, statistics, or accounting.
Even though the CFO is a major leader in the company, they must report to the CEO, who is the head of everyone and everything in the company. If the CFO is working for a financial company, they might be the highest person, but in companies that are solely financial, they are the third highest position in the company behind the CEO and the COO.
The CFO also works with all senior managers, but they do not have to report to them. However, teamwork is still important, so they must get along with all higher-level managers in order for the company to operate smoothly.
The CFO also works closely with other departments, including marketing. They might even work with the team on campaigns to see if the budget is okay.
CFOs VS Accountants
It’s important to remember that CFOs and accountants are not the same thing. Accountants only handle tasks like tax filing and bookkeeping. The CFO is in charge of the entire company’s finances, including the financial future of the company and the financial forecasts for budgets and other parts of the company.
Becoming a CFO
Before you can become a CFO, you have to be an experienced manager that can prove you have experience in many different financial-related fields and tasks. You also need a graduate degree in finance, or you need to be a Chartered Financial Analyst.
A CFO is one of the top executives in a company, so getting to that position often takes years of experience. It’s a prestigious position, and there are often many applicants for the role, all believing they have the credentials to land the job.
CEOs and CFOs
We mentioned earlier that the CFO reports to the CEO. They are not the same thing as the CEO is higher up in the company. However, both positions are involved in high levels of decision-making.
The CFO will generally make decisions alone when it comes to finances, but when the decision could impact the whole of the company, they must discuss everything with the CEO before taking a giant leap.
Who Is Under the CFO?
There are many employees in a company that are under the CFO that need to report to them. These include positions like:
- Chief Financial Officers
- Head of Finance
- Vice President of Finance
- Payroll managers
- FP&A managers
- Billing specialists
Basically, everyone in the finance team reports to the CFO as they are the leader of the finance department.
CFO and the VP of Finance
The VP of Finance is under the CFO, although many people mistakenly believe they are in the same position. Since the CFO is the highest member of the finance team, everyone in the financial department is under them, including the VP of Finance.
In smaller companies, though, the CFO might be more hands-on, and they might do more tasks that might seem under them. In larger companies, though, the CFO only does managerial tasks, and they will do more networking conferences as well as speak at events to bring awareness to the company.
The VP of Finance still leads many people in the financial department, but they lead a smaller team of usually just auditors, accountants, and financial analysts.
Most of the time, a company will only have a VP of Finance if they also have a VP of Marketing, VP of Human Resources, or other VP positions.
In a company’s hierarchy, a CFO is usually the third highest position overall, the highest position when it comes to the financial department. They are in charge of all the financial aspects of the company, including budget-making and ensuring that the company is doing its best with the money and resources that they have.
A CFO is a very important position, and one must work hard to get this prestigious title.