What Is a CFO’s Role?
A chief financial officer (CFO) facilitates an organization’s growth and corporate health. As part of the C-suite, the CFO typically holds the company’s third-highest position and receives the highest pay. In addition to working alongside other members of the C-suite (reporting directly to the CEO), the CFO interacts with the board and other department heads. Managing the company’s finances broadens his perspective and sharpens his insights into the company’s financial well-being. His experience underpins both his current business strategies and his corporate foresight.
What Are a CFO’s Duties?
A CFO’s diverse duties encompass two primary objectives:
- Overseeing financial operations.
- Providing strategic financial advice to the CEO.
A more detailed daily to-do list might include the following:
- Preparing P&L reports or other financial statements.
- Delivering reports to stakeholders and other members of the C-suite.
- Tracking budgets, cash flow, and auditing.
- Preparing income and expense reconciliations.
- Advising on mergers and acquisitions.
- Planning financial moves.
- Obtaining funding.
- Analyzing financial data.
- Forecasting future trends.
- Identifying financial risks.
- Creating solutions and growth strategies.
The CFO leads a team of accountants, bookkeepers, financial controllers, accounts receivable/payable clerks, and other financial professionals. However, the “buck stops” with the CFO: he’s accountable for each report’s accuracy and the reasoning behind each expense. Most importantly, as a financial strategist, he analyzes financial data and reports his findings directly to the CEO.
What Are a CFO’s Qualifications?
The CFO’s role tops the corporate ladder; getting there takes years of education, experience, and business savvy. A CFO must have several advanced degrees and certifications in finance and economics. A background in accounting, analysis, and investment banking also proves helpful. Most organizations require CFO candidates to have an MBA, as well. Because the CFO role is an executive-level position, CFOs must excel in leadership, communication, time management, resolving conflicts, and negotiating.
Why a CFO?
A CFO brings a lot to the table. In addition to managing the organization’s financial resources, they exhibit capable leadership, risk assessment, and industry knowledge. The CFO role is not only fulfilling but also secure and well-paid. According to salary.com, the median salary for a CFO in the United States is $425,691. On the other hand, Glassdoor reports a median SFO salary of $321,500, and PayScale sets it at $133,000. CFOs working for Nonprofits clock in an average of $137,000. Bottom line – it depends on where you live and the size of your employer’s company. Regardless, a CFO ranks high in compensation in their locality.
The United States remains foremost in the global economic forum. While the CFO role traditionally exists only in large public companies, the demand for CFOs is growing. Small and mid-sized companies increasingly recognize the benefits of having a CFO’s expertise and insight. The Bureau of Labor Statistics foresees that the need for financial managers will grow as much as 15% through 2029.
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