Chief Financial Officer (CFO)
The Chief Financial Officer (CFO) is the person responsible for overseeing the financial performance of a company. They use financial data to create strategies and facilitate decision-making. The CFO reports directly to the CEO, and they work together to optimize the financial performance of a company.
In the past, a CFO’s job was to crunch the numbers, keep the company in line with rules and regulations, and complete financial reports. While a CFO still fulfills these duties, the role has transformed into so much more.
What are the responsibilities of a CFO?
These are the primary responsibilities of a CFO:
- Plays a vital role in influencing the company’s economic strategy
- Provides leadership and management to finance and accounting team
- Oversee compliance with local, state, and federal laws
- Builds relationships with investors and financial institutions
- Analyze financial reports to develop new goals and objectives
What skills and education should a CFO have?
- Leadership: As a member of the executive team, a CFO must hold strong leadership skills. CFO’s will head internal teams and may oversee the hiring and mentoring of new employees. Their ability to lead will affect everyone under their jurisdiction.
- Advanced Analytical Skills: CFO’s must analyze financial reports to create new goals and objectives for the company, so strong analytical skills are non-negotiable.
- Strategy and Forecasting: The CFO is held responsible for navigating the company’s financial future. They aim to help the company receive the highest return on investment possible, and use financial analysis to help forecast future cash flow.
Most CFO’s will have a master’s or bachelor’s degree in finance, business, or economics. These advanced degree programs equip them with accounting and financial principles to tackle issues in the industry.
Many begin by taking entry-level positions in finance or accounting and work their way up the ranks, building a network of connections as they grow. Honing and crafting their skill set through the years allows them to eventually qualify for the position of CFO.
If you're thinking about your own path to the CFO spot, it's probably a good idea to see where you stand at your job today and how you might progress. One easy way to do that is to join your company's public org chart.
What is the difference between the CEO and CFO?
The CEO is considered the highest-ranking officer in a corporation, and they outrank the CFO. While the CFO will answer the CEO, the CFO holds the highest-ranked financial position in the company. They only oversee the financial part of the company and are directly responsible for the finance departments.
How much are CFOs paid?
CFO salaries vary greatly and depend on several factors such as education, certification, or the number of years spent in the profession. As of November 2020, Salary.com reported that the average salary for a CFO was $386,178. This amount increases when bonuses, benefits, and perks are taken into account.
Who are some famous CFO’s?
While CFO’s tend to be out of the limelight, they are still recognized for the work they accomplish. According to a list compiled by Business Insider in 2020, these are the top 5 CFOs: