Chief Financial Officer (CFO): Overview and job responsibilities

A Chief Financial Officer (CFO) plays a crucial role in the success of an organisation by managing its financial operations and making informed decisions about investments, budgeting, and cash flow.

To be an effective CFO, one should possess a combination of technical accounting skills and strategic business acumen.

CFO — Meaning

The CFO is a senior executive responsible for managing the financial activities of a company. This includes monitoring cash flow, analysing financial strengths and weaknesses, and providing corrective actions when necessary.

CFOs also prepare accurate forecasts that inform management decisions regarding future investments or cost-cutting measures.

To succeed in this role, a CFO must be an expert on current financial topics relevant to their industry and possess strong leadership and excellent communication skills. Moreover, CFOs must be able to identify potential risks and opportunities in financial data and act as strategic business partners to the CEO.

Is the CFO higher than the accountant?

Yes, the CFO is a higher-level position than an accountant. While accountants and CFOs deal with financial matters, a CFO handles more responsibilities and is a senior member of the team.

CFOs work closely with the company’s other C-suite executives to make decisions that benefit all stakeholders.

CFO vs CEO

If you’re wondering — who is higher, a CFO or CEO — the answer is the CEO. While both are high-level executives, their areas of focus and responsibilities are different, as outlined in the following table:

How to become a CFO

The journey to becoming a CFO begins with acquiring relevant degrees and includes gaining extensive experience in finance and other related fields.

Here are some of the common CFO requirements that you should know about:

Education: A bachelor’s degree in finance, accounting, or a related field is a minimum requirement for a CFO position. Advanced degrees such as an MBA or a Master’s in Accounting are preferable.

Professional certifications: Professional certifications such as the following are preferable:

• Certified Public Accountant (CPA)
• Certified Management Accountant (CMA)
• Chartered Financial Analyst (CFA)

Work experience: Several years of experience in finance, accounting, or a related field, often starting in entry-level positions and working their way up. It’s also common for CFOs to have experience in other executive roles, such as VP of Finance or Controller.

Leadership skills: Since CFO are responsible for leading and managing teams, developing leadership skills is essential.

Industry knowledge: A strong understanding of the industry and its financial operations is essential for a CFO.

Self-development: Continuing education and training opportunities can help keep your skills and knowledge relevant and up-to-date.

CFO: Job description

The CFO position requires extensive knowledge and expertise in various financial management areas. Additionally, effective leadership skills are also essential.

The CFO job description typically includes the following duties and responsibilities:

1. Financial strategy: Develop and execute financial strategies to achieve the company’s objectives.
2. Financial planning and analysis: Develop and manage the company’s financial planning and analysis processes, including budgeting, forecasting, and financial reporting.
3. Risk management: Identify and manage financial risks, such as credit and market risks, and develop risk management strategies.
4. Accounting: Oversee the company’s accounting functions, including accounts payable, accounts receivable, and general ledger.
5. Treasury: Manage the company’s cash, investments, and debt to ensure optimal cash management and efficient use of financial resources.
6. Taxation: Ensure the company complies with tax laws and regulations and optimise tax strategies to minimise tax liabilities.
7. Financial reporting: Prepare and review financial statements and reports for management, investors, and regulatory agencies.
8. Compliance: Ensure compliance with financial regulations and accounting standards, including GAAP and IFRS.
9. Financial leadership: Provide financial leadership and support to the executive team, board of directors, and other stakeholders.
10. Team management: Manage the finance team, including hiring, training, and performance management.

The CFO's job description varies depending on the company’s size, industry, and specific needs. However, the above responsibilities are typically included in most CFO job descriptions. What is a CFO’s Salary? The salary of a CFO varies depending on various factors such as location, industry, company size, and level of experience.

But according to Glassdoor, a CFO’s average annual salary is £1,38,173 in London, UK.

What is the highest CFO salary?

The highest CFO salary depends on factors such as the industry and experience level. But some examples of the highest CFO salary include:

Microsoft’s CFO, Amy Hood, earned: $975,000 in 2020 $15,00,000 in stock incentives $4,000,000 in non-equity compensation

Apple’s CFO, Luca Maestri’s annual salary, according to the company’s public filings with the Securities and Exchange Commission (SEC), is: $1 million $25 million worth of stock incentives

Conclusion: What makes a good CFO?

A Chief Financial Officer is a top-level executive responsible for managing a company’s financial actions, such as overseeing financial reporting and cash flow.

CFOs work closely with other executives to develop financial strategies that align with the company’s goals and objectives. They ensure it has the resources it needs to achieve goals.

The salary for a CFO can fluctuate based on several factors, including their experience level, the industry they work in, the company's location, and the organisation's size.