What Does a VP of Finance Do?

A Vice President (VP) of Finance is a top executive within a company that oversees all financial matters, from analyzing market trends to completing payroll.

While oversight and planning is key to the role, the VP is also rolling up their sleeves to put controls in place, play a hands-on role managing staff and making sure financial plans are executed, making the role both strategic and tactical.

Here, The Org explores what the VP of Finance role entails, the skills needed for it, what VPs of Finance earn and common paths to step into the role.

What Does a VP of Finance Do?

VPs of Finance manage a company’s finances, to put it simply. They are responsible for managing a company’s balance sheet, maximizing profits, minimizing losses and planning for growth.

The VPs must also oversee the planning, development, implementation and maintenance of an organization’s financial services, and often they are tasked with overseeing the finance or accounting department.

Depending on the company, they may report to the CEO directly, or they may have a CFO above them. Either way, the VP of Finance must analyze financial data and advise top executives on the most effective strategic decisions based on that data.

They also help businesses achieve their long-term financial goals by examining their objectives, determining the amount of resources necessary for the job and organizing a plan of action to fulfill the company's aspirations. And, importantly, the VPs are also responsible for making sure a company complies with tax laws and regulations.

What Are a VP of Finance’s Main Responsibilities?

A VP of Finance’s responsibilities include duties that fall under strategy, vision and leadership and operations.

Breaking it down more specifically, they are often responsible for the following:

• Serving as a financial advisor to the executive team and CEO
• Leading and managing budgeting processes
• Developing tracking methods for revenue and expenses and overseeing accounting operations, including payables, receivables, payroll and taxes
• Auditing and analyzing company expenses
• Gathering financial data for analysis and forecasting
• Coordinating the preparation of annual, quarterly and monthly reports.
• Being responsible for development and management of the investment plan
• Managing insurance coverage for the organization, including compliance
• Ensuring compliance with federal, state, local and organizational laws, regulations, guidelines and best practices
• Interviewing and hiring new finance team members
• Overseeing the schedules and responsibilities of managerial staff in the department.
• Fundraising
• Drafting and implementing policies and best practices, and drafting business plans for new products, services and markets.

What is the Difference Between a VP of Finance and a CFO?

Although the VP of Finance and Chief Financial Officer (CFO) roles share some similarities, they have different but equally important responsibilities within most companies.

In smaller companies, the roles can often be combined into one position. But, in a larger business, the VP of Finance regularly serves under the CFO, with both working together to oversee the accounting department and overall financial success of the organization.

CFOs tend to be more involved in the strategic financial future of an organization, with the role focused less on actual accounting and more on strategic goal setting and planning. Often the CFO is tasked with raising capital, making acquisitions and creating organic growth.

The VP of Finance tends to be more focused on the day-to-day business functions, and is often a more hands-on role with those in the accounting and finance teams. A VP of Finance can often be promoted to CFO within a company.

What Skills Does a VP of Finance Need to Have?

Given the importance of an organization having a healthy financial outlook, a VP of Finance has to have top notch organizational and managerial skills. Those management skills have to include risk management and analytical capabilities, in order to judge and predict market trends and put controls in place to deal with them. Also, they must be able to advise the executive team and CEO on how strategic plans will impact the company’s finances.

That means they must have strong communication skills, like most executive level positions, as they are tasked with relaying all the important financial information on a company in a clear and concise way to all other executives, the CEO, and oftentimes the board and investors. The VP also needs to be able to explain plans, build professional relationships with shareholders and draft statements for the finance team and other employees.

The ability to lead is core to the role, as the VP often manages and leads the financial and accounting teams within a company and is responsible for ensuring they understand, buy-in to and execute financial plans and projects.

What is the Education Does a VP of Finance Need to Have?

Given the importance of analytical skills, the need to understand a number of laws and regulations, and the requirement of managing both a company’s entire financial portfolio and the teams that oversee it, it is common for VPs of Finance to have extended educational experiences.

The typical educational background for a VP of Finance is a bachelor’s degree, often in accounting, finance, economics, or business administration, and a master’s degree, often an MBA or MFA. They also often have professional certifications and continued education.

Certified Public Accountant certifications are common in the field and are often a job requirement or bonus.

What Is the Career Path of a VP of Finance?

A background as a financial analyst, accountant, or loan officer can often pave the way for a VP of Finance job, and experience in accounting, marketing and investing are critical to getting a foot in the door.

Most companies will also require managerial or leadership experience, often in the finance industry. More established companies will most likely look for candidates with at least 10 years of experience in finance and management.

Applicants for a VP of Finance role must have a track record of setting and executing strategic financial goals and developing financial models.

What Is the Average Salary of a VP of Finance?

The median annual wage for a VP of Finance was $134,180 in May 2020, according to Bureau of Labor Statistics. That breaks down to $64.51 per hour.

BLS predicts VP of Finance roles will increase 17 percent from 2020 to 2030.