CFO Job Description (Chief Financial Officer)
CFO is the Chief financial officer who manages the finance of the company, which involves planning, taking significant decisions relating to investment, making strategies, and managing financial activities, including budgeting, forecasting expenses, mitigating financial risks for sustainable growth with overall supervision of finance and accounts team the employees.
A Chief Financial Officer (CFO) is the senior executive in an organization managing the financial actions of a company. Chief Financial Officer (CFO)Chief Financial Officer (CFO)The full form of CFO is Chief Financial Executive, and he or she is a top level executive of the firm who is responsible for the firm's overall finance functions and has the authority to make financial decisions for the organization. is one of the key people to provide programmatic and operational support to the company. The CFO supervises the entire finance unit and is the chief financial spokesperson for the organization. The primary role of a chief financial officer includes driving company finances, performing risk management, and deciding on investment strategies.
Generally, the CFO reports directly to the president/ CEO and assists the Chief operating officer (COO)(COO)COO stands for Chief Operating Officer. It is a position of Top Management that reports to the Chief Operating Officer (CEO) and is in charge of the day-to-day operations and execution of business strategy. in all the strategic and day-to-day matters relating to cost-benefit analysis, budget management, forecasting needs, and securing new funding.
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Basic Description of CFO Job
The Chief Financial Officer (CFO) is accountable for the company’s financial, administrative, and risk management operations. The primary role includes the development of an operational and financial strategy, metrics tied to the overall group strategy, and the ongoing monitoring and development of control systems designed to report accurate financial results and preserve company assets.
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Role of Chief Financial Officer (CFO)
- Prepare and present financial data: The primary CFO job description includes presenting and reporting accurate and timely company financial information. It includes working on annual financial reporting, corporate revenue/expense reporting, press releases, development, and monitoring contract/grant and organizational budgets. All stakeholders like shareholders, creditors, investors, management, and other interested persons rely on the financial information provided by the CFO job description.
- Taking a decision and maintain capital structure: is another important work included in the CFO job description. Chief Financial Officer (CFO) is responsible for the company’s overall financial health. He has to decide how a company’s funds should be invested to make the financial position better. He should consider all factors like risk, liquidity, market conditions, etc. A CFO’s job description also determines an adequate capital structure of the company. He must know the best debt-equity ratioDebt-equity RatioThe debt to equity ratio is a representation of the company's capital structure that determines the proportion of external liabilities to the shareholders' equity. It helps the investors determine the organization's leverage position and risk level. mix for the company so that the company’s funds are managed in the best possible manner.
- Not only the past but looking for future also: Chief Financial Officer (CFO) is responsible for the company’s past and present financial condition and keeps an eye on the company’s future financial health. He must be able to identify the most efficient areas of the company and know how to capitalize on them.
- The role of the Chief Financial Officer is to Participate in developing new business and assist the CEO and COO in the drafting of prospective programmatic budgets, identifying new funding opportunities, and determining the cost-effectiveness of future service delivery. It will include working with other key senior persons of the organization to ensure financial and operational success throughCost-benefit analysis is the technique used by the companies to arrive at a critical decision after working out the potential returns of a particular action and considering its overall costs. Some of these models include Net Present Value, Benefit-Cost Ratio etc. cost-benefit analysisCost-benefit AnalysisCost-benefit analysis is the technique used by the companies to arrive at a critical decision after working out the potential returns of a particular action and considering its overall costs. Some of these models include Net Present Value, Benefit-Cost Ratio etc. and compliance with all related contractual and programmatic requirements.
- Training and increasing awareness and knowledge related to financial management matters across the organization.
- The other role of the Chief Financial Officer is to work with the President/CEO on the company’s long-term strategic vision, which includes fostering and cultivating stakeholder relationships across various levels and assisting in the development and negotiation of contracts.
- The Chief Financial Officer’s role is to develop and maintain a check of internal controlsInternal ControlsInternal control in accounting refers to the process by which a company implements various rules, policies, or procedures to ensure the accuracy of accounting and finance information, safeguard the various assets of the business, promote accountability in the business, and prevent the occurrence of frauds in the company. to safeguard the organization’s financial assets.
- Chief Financial Officer’s role is to Attend Board and subcommittee meetings regularly and provide useful/necessary financial inputs on various parameters.
- The Chief Financial Officer’s role is to Monitor the banking activities of the organization.
- The Chief Financial Officer’s role is to ensure adequate cash flowCash FlowCash Flow is the amount of cash or cash equivalent generated & consumed by a Company over a given period. It proves to be a prerequisite for analyzing the business’s strength, profitability, & scope for betterment. to meet the organization’s needs.
CFO Job Description – Skills
The role of Chief Financial Officer job description is essential to the success of the organization because it is the Chief Financial Officer job to look for the company’s strengths and understand weakness and deal with them and prepare financial reports and communicate it with other people and assure them that we are on the right path. The requirement to become a CFO is different based on the organization’s structure. However, common traits include:
- Strategist: The CFO needs to understand the company’s perspective broadly as the role of Chief Financial Officer job description is not confined to the finance department only. CFO’s have to be more strategic and act as more of a business partner in assisting the President/CEO.
- Translator: The CFO must be able to translate financial KPIs of the organization into useful information for the CEO and turn the CEO’s strategy into a financial number that can be shared with the public or across the organization. The CFO must feed actual results back to management and suggest ways to improve them.
- Financial information: Reporting financial information to the board and approving all financial reports.
- Spokesperson: The CFO is responsible for media/shareholders for any financial issues/updates, which includes communicating with shareholders and motivating colleagues to execute the company’s strategy.
- Broad technical knowledge: The CFO needs to have broad technical knowledge. Along with financial management and reporting, CFO’s should know the basics of credit, investment, and cash flow forecastingCash Flow ForecastingCash flow forecasting is forecasting or anticipating the cash inflow and outflow for the future period by the management of the business to make sure that the business will have sufficient funds to carry out the activities on a regular basis, and if there is any shortfall, they has to plan for alternate sources of funding for the business. , information about technology systems, and much more.
- Risk manager: The CFO needs to be a trusted advisor regarding risk, especially as businesses become more complex and international. Not only do they need to identify, assess, and respond to ongoing and emerging risks to the organization, but they need to ensure compliance with a growing number of regulations and laws.
- Experience in corporate governance and good negotiable skills
CFO Job Description – Qualification
- Must have a master’s degree in accounting or business administration or equivalent business experience. Preferred candidates with an MBA in Finance and the Certified Public Accountant or Certified Management Accountant designations
- 10+ years of experience for a major company or division of a large corporation.
- Experience in partnering with an executive team, and have a high level of written and oral communication skills.
CFO Job Description – Conclusion
The role of Chief Financial Officer (CFO) is always evolving and has changed a lot with a change in industry structure. As the chief financial officer, the job description demands the person to think from both the financial and operational perspective, information and knowledge about the latest trend, and always acting as a catalyst to the candidate’s success in the role.
This has been a guide to CFO Job Description (Chief Financial Officer). Here we will understand the roles and responsibilities of Chief Financial Officer (CFO), including the Basic Function of Chief Financial Officer, Skills required, and Qualification required.