Chief Financial Officer – Roles and Responsibilities?

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Chief Financial Officer – Roles and Responsibilities?

Introduction

Are you searching for career prospects that come along with commerce studies? A finance and accounting student can aim for numerous prestigious professions to make a successful livelihood. One such job is that of a CFO (expanded as Chief Financial Officer).

With finance as their expertise, CFOs are the professionals business organizations seek. With increasing prominence among all sizes of firms, holding the title of CFO stands strong as a career that provides good earnings, among other benefits.

Organizations have different positions for the variety of benefits that these experts can bring to maintain the financial well-being of the business. Firms often require such experts to manage their finances and help their businesses grow. CFOs are perfectly capable of handling such responsibilities at a company. 

In the recent past, the economic crises experienced by most businesses due to the global pandemic have left many companies considering investing in the position of a CFO.

Curious to know about this job title? This article is meant to provide you with all details you need to know about becoming a CFO.

What is a CFO? – Job Description

The full form of CFO is Chief Financial Officer, a respected title among various professions in finance and accounting. Holding the responsibility of managing a business’s fiscal health, a chief financial advisor is a high-ranking professional in finance-related job positions in an organization. 

In simple terms, the Chief Financial Officer’s job description includes:

  • Maintaining track of cash flow.
  • Planning the finances.
  • Analyzing the firm’s financial strengths and weaknesses while proposing the best possible strategy to help maintain the firm’s economic well-being.
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With a visionary mindset, CFOs make great leaders of an organization’s finance team and are known to make strategic moves solely aimed toward the betterment of the business. 

A CFO reports directly and works closely with the main leadership of a company, that is, with the CEO and the board of directors. They usually lead a team focusing on finance and accounting, consisting of other senior leaders such as the Vice Presidents of finance and the operational staff, i.e., bookkeepers, accountants, data analysts, etc.  

What does a Chief Financial Officer do? – Roles & Responsibilities

A firm’s finances are one of its most crucial aspects, and CFOs are entrusted with handling this aspect to the best of their ability. The role of a CFO is two-fold; while they look over the firm’s finances and the team members working on them, they also serve as financial advisors to the CEO and other board members.

As a chief financial officer, one’s responsibilities include, but are not limited to,

  • Planning and putting forward an effective and productive financial strategy for the company,
  • Ensuring that the finances of the firm are being utilized efficiently as well as wisely,
  • Any financial risks that may obstruct the firm’s growth are dealt with strategically,
  • Leading and guiding the finance & accounting team,
  • All budget and finance-related negotiations are well-managed,
  • Taking care of other finance and accounting-related tasks such as financial forecasting, auditing, etc.

Other areas where CFOs need to look after the company include:

  • Risk management related to investments & liability
  • Investment strategies
  • Banking operations
  • Investor relationship management
  • Vendor relationship management
  • Personnel supervision
  • Management of financial IT systems
  • Enforcement compliances
  • Data analysis
  • Project management

How does having a CFO benefit a company?

The Chief Financial Officer guides the path toward improving and maintaining the financial health of an organization. The experts are hired to oversee the accounts and finances so that the CEO can focus on other aspects of the company. 

Hiring a CFO becomes essential when crucial financial tasks are not being accomplished successfully. As we mentioned before, hiring a CFO is more like an investment than it is an expense. 

Two major functions that should be performed under the supervision of a CFO include the proper evaluation of the company’s cash flow, profits, and losses, along with a well-planned and properly executed financial strategy. 

Skills That a CFO Must Have

Along with various central roles and responsibilities that can benefit the company, there are other skills that an experienced and valued Chief Financial Officer can bring to the table.

Some of the skills that are most looked for by employers when hiring a CFO include:

  • Strategic decision-making: Being high-ranking finance professionals, CFOs are the major decision-makers and must be competent at what they do.
  • Goal-oriented: the central aim of every CFO should be the goal of the improved financial well-being of the business. 
  • Hard-working: there are not just one but many tasks that a CFO has to perform while maintaining the finances. To carry out all tasks to one’s best ability, CFOs must have the will to work harder than other employees.
  • Effective Communicators: CFOs also maintain relationships with the investors and vendors associated with the company. Also, as advisors of the CEO, they must be able to effectively communicate their strategy ahead.
  • Leadership Skills: A Chief Financial Officer leads and guides a team of other finance operators to enable proper functioning.
  • Growth Experience: Usually, CFOs possess great experience in their field and can help find opportunities for their company to invest in while wisely using its capital.
  • Risk Assessment & Management: Debt, liquidity, regulatory compliance, supply chains, hiring of contractors, and proper implementation of technology are some important factors to be overseen by a CFO.
  • Industry Knowledge: This skill helps these finance experts stand out and be among a company’s top leaders. With their industry knowledge, they are able to frame a better financial strategy.
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Steps to Becoming a CFO – Educational Background

There are three major points to keep in mind if you wish to see yourself as a chief financial officer in your professional future. These three factors are the right qualifications, adequate experience, and the right connections.

  1. Get the Right Chief Financial Officer Qualifications – CMA USA, CPA, MBA

While a bachelor’s degree in the related field (B.Com, etc.) is the first step, there are three other professional certificate courses one can pursue to become better qualified for the position of CFO. These certifications include CMA, CPA, and MBA.

  1. Gain the Experience

For pursuing any of the professional certificate courses mentioned above, one must have some experience in the relevant fields. Some experts have said that becoming a well-established CFO may take up to 10 years of experience. So, plan your journey with adequate time dedicated to gaining work experience that can push you toward becoming a Chief Financial Officer.

  1. Build a Network & Get More Opportunities

Your work environment and acquaintances go a long way in helping you move ahead in the professional aspect of your life. A mentor can greatly help you from the beginning of your career. Not only this, but another aspect of strong networking skills is that it helps you grow relationships in your field that can open new opportunities at any point in your future as a CFO.

Once you have appropriately gathered these three factors, another step in this journey of becoming a CFO includes your decision to start your own practice or join a firm.

Frequently Asked Questions

1. What is the chief financial officer’s salary?

The average chief financial officer salary in India falls between INR 8 Lakhs to INR 102 Lakhs. The average annual salary is believed to be INR 40 Lakhs.

2. Is the CFO higher than the CEO?

A CFO reports to the CEO of the company. A Chief Executive Officer (CEO) is responsible for taking care of the entire company, while a CFO oversees mainly the company’s finance department. Thus, a CEO is higher in rank than a CFO.

3. What is the full form of a CFO?

CFO stands for Chief Financial Officer, a professional responsible for overseeing the finance and accounts of a company/business.

4. What are the qualifications necessary for CFO?

There are no compulsory qualifications for being a CFO, but since the position requires one to have at least 8-10 years of experience in the field, one can upskill their bachelor’s degree into CMA, CPA, or MBA.

Conclusion

Becoming a Chief Financial Officer may be a long journey, but we can make one step of it easier for you! If you wish to upgrade your qualifications with the CMA USA certificate course, NorthStar Academy is the right place for you!

The US Certified Management Accountant (CMA) certification is meant to provide aspirants with great strategic knowledge about management accounting that can help them achieve better CFO job opportunities as well!

Curious to know more about pursuing CMA USA recognized by IMA? Reach out to NorthStar Academy to learn more from the experts today to kickstart your successful CFO journey! Call us at +91 8147470707 or contact us here.

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