As of 2018, there were nearly 15 million Americans employed in management positions in the US.
Although technically considered part of management, C-level executives have far more responsibility than your typical team manager. And that’s true for the Chief Executive Officer as much as the Chief Financial Officer.
But what does a Chief Financial Officer do?
CFO duties include everything from making financial decisions to making projections about the future. It takes skill, experience, and the ability to manage teams to be a CFO.
To learn more about Chief Finance Officer roles and responsibilities, dive into this brief guide.
What Is a CFO?
A Chief Financial Officer is a C-Level executive. They work alongside the Chief Executive Officer, Chief Operations Officer, and other C-Level executives and are part of the leadership of a company.
As the title suggests, they primarily focus on the financial side of operations. They manage the company’s finances and are also the principal decision-maker when it comes to those finances. In the past, they had to be physically present to do their job but today there are virtual options.
What Does a Chief Financial Officer Do?
As mentioned, the CFO primarily focuses on the financial management of a company. This is usually comprised of three separate tasks: reporting, liquidity, and return on investment. We’ll explore each of these tasks in more detail below.
The CFO works with the accounting or treasury team to create historical financial reports. These reports are then shared with the CEO and other C-level management as well as shareholders, lenders, and employees. They may also be required by regulatory bodies and governments for purposes such as taxation.
The CFO is responsible for managing the cash flow of a company. They ensure that the company can meet its financial commitments, today and in the future. To do this, they work with accounts payable, accounts receivable, and even inventory management teams.
3. Return on Investment
Finally, and perhaps most importantly, the CFO has to ensure that the company is making money. They do this by calculating what the highest return on assets and capital are and then making decisions accordingly. To do this, they must employ analytics and in-depth reporting, which is usually handled by an accounting team.
How Do You Become a CFO?
Most CFO’s have earned a degree in finance, economics, accounting, or business. But education isn’t enough to become a CFO, you’ll also require a great deal of experience. Indeed, most CFO’s have worked with a company in their finance divisions before working their way up to a C-level position.
Beyond experience and education, CFO’s also requires management skills because they typically manage large teams of people. They’re innovative, proactive and proficient in making projections that inform decisions.
Are You a Leader?
So, what does a chief financial officer do? They manage all the financial aspects of a company. That includes reporting, liquidity, and return on investment as well as managing teams of people who help accomplish these tasks.
If this sounds like something you’d be interested in, you need to know more about how to be a good leader. Check our blog regularly for tips and advice that help you get there.