The Role of a CFO
What is a CFO?
A CFO or Chief Financial Officer, is a corporate executive primary responsible for managing the financial risks of a corporation. The CFO, in addition to broadly handling the finances of a corporation, is responsible for financial planning, record-keeping, as well as financial reporting to the Chief Executive Officer, the Board of Directors and other members of higher management. In some industries, the CFO will also be responsible for complex data analysis; however, the primary function of the CFO, the one duty that remains constant across the majority of business models, requires the CFO to report directly to the Chief Executive Officer (CEO) and the Board of Directors.
Although the responsibilities and duties of a CFO will vary based on the size of the company where the individual is employed, all Chief Financial Officers are required to handle the inflow and outflow of the respective firm’s capital. In addition to maintaining a responsible balance sheet, the CFO must report all expenses, investments and profits to the executive officers of the organization. In large corporations, the primary duties of the CFO will be exhaustive; the individual may be required to oversee and manage the accounting department, while developing strategies to maximize profit for the company. Furthermore, the individual will ultimately be responsible for payroll and the delivery of accurate
What are the Qualifications of a CFO?
The majority of CFOs of large companies possess an expertise and considerable experience in finance; almost all CFOs have MBAs or come from accounting backgrounds. As the head of a company’s finance department, the CFO must be extremely knowledgeable with finance and more specifically balancing the corporation’s balance sheet, working with investment banks or financiers to evaluate risk and maintaining efficiency with the firm’s finances.
What does a CFO do for a Government Agency?
The Federal government of the United States, to maximize efficiency and cut-down on frivolous spending, has incorporated a number of elements of business-sector practices in its management approach. One of the primary shifts to an experienced business model is found in the use of the CFO position. The Chief Financial Officers Act, which was formally enacted in 1990, created a CFO post in each of the 23 federal agencies. This legislation was intended to improve the government’s financial management and develop standards of financial responsibility—as well as performance—for budgeting and disclosure purposes.
