Every successful business is comprised of a variety of different roles and responsibilities. From upper-level management to entry-level positions, each role is vital to achieving company-wide success.
Although the titles of many positions may sound familiar, it may prove challenging to identify the specific tasks and responsibilities assigned to several common careers. One example of a well-known job title that is often misunderstood is chief financial officer (CFO).
So, just what does a CFO do, exactly?
A CFO’s responsibilities concern a company’s finances, meaning the individual in this role must have an extensive background in accounting, a field that is often a gateway to a chief — or C-level — position in finance. Accounting careers involve examining, tracking and maintaining a company’s financial records and tax documents. These responsibilities result in valuable experience with risk management, budget planning and financial literacy, all of which are vital to a CFO’s success.
What Does a CFO Do?
In a C-level leadership position, a CFO is faced with a variety of tasks that must be completed impeccably for the sake of the company’s financial stability. The exact job description for a CFO will vary depending on a company’s size, investors and profits, but according to Investopedia, every CFO can expect to encounter the following responsibilities:
Whether it’s the decision to financially invest in a partnership or to invest time in training new employees, all companies take risks. It is the CFO’s responsibility to ensure that the risk surrounding each financial investment is safe and manageable. To do this, the CFO must continually track the company’s equity and debt.
To determine where a company is headed, look at its past. A CFO documents a company’s financial history and tracks notable trends to provide accurate information to shareholders, business partners and budget planners.
Every successful department must have a progressive leader. The CFO oversees a company’s accounting team to ensure that all procedures pertaining to finance are conducted properly.
An Accounting Career Starts with Education
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CFO vs. CEO
Though all C-level positions are chief roles within a company, they’re all different when it comes to their individual goals. The following are some key differences between a CFO and CEO:
The CFO focuses on a company’s financial performance, while a CEO focuses on how a company conducts its performance procedures.
A CFO establishes positive relationships between a company and its financial institutions and investors, while a CEO focuses on maintaining a positive image to the public and its business partners.
Opportunities for Success
A CFO ensures that a company has enough financial power to achieve success, while a CEO determines which steps should be taken to lead a company to success.
How to Become a CFO
A chief financial officer is the highest position attainable in the field of accounting. Most companies require a CFO to hold a bachelor’s degree in accounting or a related business field, as well as a Master of Business Administration (MBA). And because of the extensive responsibilities that come with the position, a CFO must also have a deep understanding of business protocol and financial risk that only work experience can provide. Several years of high-level accounting work experience is often required to achieve this C-level position.
If you’re interested in an upper-level career in finance with maximum salary potential, start with West Virginia State University’s online B.S. in Business Administration: Accounting program. Focusing on the fundamentals of accounting and business, this program provides students with the skills needed for effective problem solving and critical thinking in the finance world. The 100 percent online program offers a full roster of courses accredited by the Accreditation Council for Business Schools and Programs.