A Chief Financial Officer (CFO) is the senior executive responsible for managing the financial affairs of a company. The CFO’s primary responsibilities include:
No one regulator or authority specifies the complete form of a CFO. However, “chief financial officer” is generally used to describe an officer who has overall responsibility for a company’s finance function. This includes strategic and operational aspects of finance, such as long-term planning, budgeting, risk management, investor relations, etc.
The role of the chief financial officer is to provide leadership and direction for all financial activities of the company. The CFO is responsible for the development and implementation of economic strategies and the stewardship of all financial resources.
The average CFO has at least ten years of accounting or finance experience and a master’s degree. Additionally, a CFO should be well-versed in Generally Accepted Accounting Principles (GAAP). Some other desirable qualities in a CFO include excellent interpersonal and communication skills, sound judgment, and creative problem-solving abilities.
The primary difference between a finance director and a CFO is that finance directors are not part of the top executive team. The CFO reports directly to the CEO, while finance directors report to the CFO.
Finance directors are responsible for financial management, including planning, budgeting, forecasting, and reporting. They also play a crucial role in developing and implementing financial strategies. The CFO is responsible for overall financial management and strategy but may delegate some of these responsibilities to the finance director.
Another difference between a finance director and the CFO is that the finance director generally has more direct experience in financial management than the CFO.