Corporate Finance Tutorials
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CFO Job Description (Chief Financial Officer)
A Chief Financial Officer (CFO) is the senior executive in an organization managing the financial actions of a company. Chief Financial Officer (CFO) is one of the key people to provide both programmatic and operational support to the company. The CFO supervises the entire finance unit and is the chief financial spoke person for the organization. The basic role of chief financial officer includes driving company financial, performing risk management and deciding on investment strategies.
Generally, Chief Financial Officer (CFO) reports directly to the president/ chief executive officer (CEO) and assist the Chief operating officer (COO) in all the strategic and day to day matters relating to cost-benefit analysis, budget management, forecasting needs and securing of new funding.
Basic Description of CFO Job
The Chief Financial Officer (CFO) is accountable for the financial, administrative and risk management operations of the company. The basic role includes the development of an operational and financial strategy, metrics tied to the overall group strategy, and the ongoing monitoring and development and of control systems designed to report accurate financial results and preserve company assets.
Role of Chief Financial Officer (CFO)
- Prepare and present financial data: The primary CFO job description includes presenting and reporting accurate and timely financial information of a company. All stakeholders like shareholders, creditors, investors, management and other interested persons rely on the financial information provided by the CFO job description. This includes working on annual financial reporting, organizational revenue/expense reporting, press releases, development and monitoring of contract/grant and organizational budgets.
- Taking a decision and maintain capital structure: This is another important work included in CFO job description. Chief Financial Officer (CFO) is responsible for the company’s overall financial health. He has to take a decision like in what manner 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 job description also determines an adequate capital structure of the company. He must know what should be the best debt-equity mix for the company so that company’s funds are managed in best possible manner.
- Not only past but looking for future also: Chief Financial Officer (CFO) is not only responsible for past and present financial condition of the company but also keeps an eye on the future financial health of the company. He must be able to identify most efficient areas of the company and knows how to capitalize it.
- The role of 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 prospective service delivery. This will include working with other key senior persons of the organization to ensure to ensure financial and operational success through cost-benefit analysis along with 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 Chief Financial Officer is to work with the President/CEO on the long-term strategic vision of the company which includes fostering and cultivating stakeholder relationships across various levels as well as assisting in the development and negotiation of contracts.
- Chief Financial Officer role is to Develop and maintain a check of internal controls to safeguard financial assets of the organization.
- Chief Financial Officer role is to Attend Board and subcommittee meetings on a regular basis and provide useful/necessary financial inputs on various parameters.
- Chief Financial Officer role is to Monitor banking activities of the organization.
- Chief Financial Officer role is to Ensure adequate cash flow to meet the organization’s needs.
CFO Job Description – Skills
Role of Chief Financial Officer job description is essential to the success of the organization because it is Chief Financial Officer job to look for company’s strength and understand weakness and deal with them and prepare financial reports and communicate it with other people and ensure them that we are on 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 have a good understanding of company perspective at a broad level as the role of Chief Financial Officer job description is no 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 financials number which can be shared to the public or across the organization. CFO must be able to feed actual results back to management and suggest ways to improve it.
- Financial information: Reporting of financial information to the board along with approving all financial reports.
- Spokesperson: The CFO is responsible to media/shareholders for any financial issues/update 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 forecasting; information about technology systems and much more.
- Risk manager: The CFO needs to be a trusted advisor when it comes to 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
Role of Chief Financial Officer (CFO) in always evolving and has changed a lot with a change in industry structure. As the role of chief financial officer job description demands the person to think from both the financial and operational perspective, information and knowledge about the latest trend with always act as a catalyst to the candidate success in the role.
This has been a guide to CFO Job Description (Chief Financial Officer). Here we are going to understand the roles and responsibilities of Chief Financial Officer (CFO), including the Basic Function of Chief Financial Officer, Skills required and Qualification required.