Learn more about what a Chief Financial Officer is in business.
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A chief financial officer (CFO) is a senior executive who manages the financial business and actions of a company. The business definition of a chief financial officer’s duties usually includes tracking company cash flow and creating the company’s financial plan. A CFO also engages in strategic financial planning for their company. They identify financial strong points and weaknesses and propose actions to bolster and shore up the business.
A chief financial officer is not only an executive-level employee, they are also responsible for managing the company’s finance and accounting department employees. The meaning of the chief financial officer’s role is to oversee the company’s controller, accountants, and all the individuals responsible for ensuring that the company’s financial reports are accurate and completed on time.
The CFO is almost always required to report to the company’s chief executive officer (CEO). One benefit of a chief financial officer’s expertise is their input on the company’s investments and financial management. A CEO will usually attribute some of the business’s overall success to the company’s CFO. CFOs help perform cost-benefit analyses on new projects and product launches. They also help their companies weather economic downturns or changing consumer preferences.
A chief financial officer is considered a C-suite role. C-suite is a term used to describe the most important or “chief” executives in a company. These roles typically include the CEO, CFO, chief operating officer (COO), and chief information officer (CIO), and can also include a chief risk officer (CRO), chief marketing officer (CMO), or chief legal officer (CLO) depending upon the nature of the business.
The chief financial officer, by definition, requires a certain amount of expertise. Most CFOs have many years of experience in business and accounting and have worked in the industry of the company for which they have become CFO. Some have a chartered financial analyst (CFA) designation or CPA license. Many CFOs find that it helps to have a background in investment banking or strategy as well.
A chief financial officer can help you ensure financial compliance as well as accounting quality control within your company. CFOs are also increasingly responsible for overall systems and processes, like workflow software, customer experience software, and payments systems. Being responsible for the company’s main financial and strategic systems makes the CFO a key partner to the CFO and other C-suite executives.
The quality of a CFO’s contribution to their company can have a major impact on the company’s strategic plans. Companies rely on the CFO and their team to provide analysis and reports to guide C-suite decision-making. A company with a great CFO may have unlimited potential for growth!
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Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.