Difference Between CEO and CFO
A CEO of the company is a highest-ranking executive with the primary responsibilities of taking major corporate decisions, being medium of communication between corporate working and its board of directors and he is the company’s public face as elected by shareholders and board whereas, CFO is a senior executive with responsibility for the financial affairs of a company or other institution, which involves planning, taking significant decisions relating to investment, making strategies and managing finance activities.
CEO has the vision for the business and some perspective point of view what the business is going to be at some point down the road.
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CFOCFOThe 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. read more is the head accountant of a company and manages anything that has to do with the company finances their objective is more strategic towards business transformation and prioritize cost managementCost ManagementCost management is an integral part of business management that works on the basis of estimates, where various activities such as data collection, data analysis and mechanisms, process evaluation, and event reporting are carried out so that the decision-maker can plan and control the organization's budget requirements, allowing the decision-maker to make informed decisions.read more and balance with an increasing focus on growth profitable. Whereas the CEO is an individual who holds the highest rank of the Organization and the primary responsibility includes major corporate decisions.
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CFO vs CEO Infographics
Let’s see the top differences between CFO vs CEO.
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Key Differences
CEOCEOChief Executive Officer is the full form of CEO. He is the most senior member of a corporate organization, an executive who oversees the whole administration and operations of the company and reports directly to the board of directors and chairman, with the sole purpose of generating wealth for the company's stakeholders and shareholders. read more works in a strategic way and play a critical role in the success of an organization and performs the following responsibility
- Work according to the vision and target set by the company.
- Represent the company and address the management as requires.
- It helps to understand the employees, directors, investors, and customers what the company does.
- Address the critical issues associated with day to day to business.
- Meeting with other lines of business heads that run ideas past and collaborate for the new business opportunity.
- Take the decision regarding the investment opportunity by taking the view of other board members.Board Members.Board members comprise the individuals whom the shareholders elect as their representatives. They are responsible for taking crucial corporate decisions regarding the company's policies, dividend payouts, top-level managers' recruitment or layoff and executive compensation.read more
Whereas CFO works in a separate vertical of an organization and performs the task related to managing finance action of a company which includes:
- They Manage Cash Flow
- Develop a structural plan for the budget
- Cash Forecast
- Ensure cash Last to next valuation set-up
- Monitor and report variances
- Budget capital expenditure
- Evaluate Lease vs Purchase evaluation
- Management meetings (Monthly and Quarterly ) to give the track record of the company I,e the performance of the company
Chief Executive Officer & Chief Financial Officer requires different skillsets to become more successful and the origination looks for the following skillset because the people they are going to hire will take the company into a higher level. Below we have mentioned important skills to become more successful at work.
Skill Requirements
Important Skills Requirement for CEO
- Know how to manage People
- Leadership Skills
- Communication skills
- Relationship building skills
- Negotiation skills
- Strategic development
- Creative thinking
- Stress management
Important Skills Requirement for CFO
- Business understanding
- Communication skills
- Relationship building skills
- Finance Teambuilder
- Strategic development
- Risk identification
- Accounting Knowledge
- Business acumen
- Fraud prevention
- Investment and credit riskCredit RiskCredit risk is the probability of a loss owing to the borrower's failure to repay the loan or meet debt obligations. It refers to the possibility that the lender may not receive the debt's principal and an interest component, resulting in interrupted cash flow and increased cost of collection.read more
- Risk management & forecasting
- Financial and regulatory reporting
CEO vs CFO Comparative Table
| CEO | CFO |
|---|---|
| Assemble the business team to put together the group of people who are going to take business | Coming up with a solution in terms of where the company is going by Making the decision for driving changes and Promote business ethical practices |
| Meet the formal planning process for the organization, document the path that the business is going to take to get to where it needs to go | Cost allocationCost AllocationCost Allocation is the procedure of recognizing & assigning costs to different cost objects like a product, department, program, customer, etc., as per the cost driver serving as the base for this process. read more |
| Monitor the plan and report back to stake holder’s board regarding the progress of the business | Balancing business book |
| Clearly, articulate the vision to it is all stakeholders, customer, employees, and shareholder to engage them in the success of the business | Contribute to the strategic direction |
| Leadership Role to manage the day to day affairs. | Quality and accurate reporting of financial statementsFinancial StatementsFinancial statements are written reports prepared by a company's management to present the company's financial affairs over a given period (quarter, six monthly or yearly). These statements, which include the Balance Sheet, Income Statement, Cash Flows, and Shareholders Equity Statement, must be prepared in accordance with prescribed and standardized accounting standards to ensure uniformity in reporting at all levels.read more. |
| Set the direction and lead the organization. | Strategy for risk mitigation. |
| They not only manage the company but also lead the company. | Seeing the opportunity and supporting the business to grow. |
Conclusion
CEO and CFO are an integral part of every organization and play an impotent role to run a business. They are responsible for all the activities within an organization also help the Directors and investors to take the decision regarding the investment decision like the expansion of business or M&A moreover they represent an organization and build a relationship with Government and co-founders. They also set the road for the company for growth and expansion of business and work together to achieve the company goals within the stipulated time period.
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