CFO Job Description

Written by: Evie Courtier
Published on: 22 Nov 2023

CFO

A Chief Financial Officer (CFO) is a senior executive responsible for managing the financial actions of a company. Their role is crucial in strategic decision-making and ensuring the financial health of the organisation. Often seen as a milestone in the finance and accountancy world, a CFO sits as the highest-ranking financial professional within an organisation, with strong earning potential. Within this CFO job description, we’ll detail what a CFO does, the typical career path to becoming a CFO, and the current CFO roles available on GAAPweb.

  • What does a CFO do?

    As a CFO, you hold responsibility for building a successful finance and accounting team, whilst acting as a visionary in your own right. Valued CFOs have an eye toward the future, working closely with other senior leadership members, to recommend and develop strategic business moves.

    In day-to-day life, a Chief Financial Officer must ensure that revenues and expenses stay in balance, whilst overseeing financial planning & analysis functions, advising on mergers and acquisitions, acquiring funding, and working with senior management to assess financial performance. CFOs may also help set technology direction, especially within niche sectors, such as fintech, making recommendations on everything from supply chain to marketing based on their fiscal insights and industry knowledge.g

  • What’s the difference between a CEO and CFO?

    The CEO (Chief Executive Officer) and CFO (Chief Financial Officer) are both top-level executives in a company, with a CEO, depending on corporate structure, taking responsibilities for a companies’ operational and fiscal health.

    The CEO is the official face of the company, acting as head to the press, board, and public. Their role surrounds setting the company's strategic direction and vision, making major corporate decisions, building and maintaining relationships with key stakeholders, and overseeing the execution of business plans and ensuring the company's success.

    By contrast, CFOs are the most senior financial officers in an organisation. They report directly to the CEO and work closely with the board of directors. While the CEO occupies a higher-level position from an organic standpoint, in high-functioning companies, the CFO and CEO work collaboratively, to align financial goals with the overall objectives of the organisation. CFOs take complex data, including past, present and future predictions into perspective, helping the CEO make informed financial decisions.

  • What does a role as a CFO entail?

    The role of a CFO is twofold: they oversee the organisation’s financial activities, including managing the myriad of finance and accounting professionals within the company, and serve in a strategic advisory role for the CEO and C-suite peers. The duties across each sector, whether you work within the realm of CFO Business Services jobs or CFO technology jobs, will incorporate bespoke duties to the sector, yet contain a variety of overlapping duties.

    Responsibilities of a CFO include:

    Budgeting and Forecasting:

    • Leading the budgeting process and providing financial forecasts.
    • Monitoring and analysing variances between actual and budgeted financial performance.
    • Understanding the various departmental level forecasts to create profit projections for the CEO and shareholders.

    Cash Flow Management:

    • Managing cash flow to ensure the company's liquidity and ability to meet financial obligations.
    • Implementing strategies to optimise working capital.

    Return on investment (ROI):

    • Ensuring a strong return on investment (ROI) for their company. ROI is a measure of the likelihood of receiving a return on pounds invested and the precise amount of that return. CFOs add context to the basic ROI, evaluating whether a project will deliver sufficiently robust ROI to be worth the investment.

    Capital Structure and Financing:

    • Determining the optimal capital structure for the company.
    • Managing relationships with financial institutions and raising capital when needed.

    Investor Relations:

    • Managing relationships with investors and analysts.
    • Communicating the company's financial performance and strategy to the investment community.

    Liquidity:

    • Assessing the organisation’s ability to pay off its short-term liabilities. Liquidity is usually expressed as a ratio or a percentage of what the company owes against what it owns.

    Mergers and Acquisitions (M&A):

    • Leading financial aspects of mergers, acquisitions, and divestitures.
    • Conducting due diligence on potential acquisitions.

    Tax Planning:

    • Developing and implementing tax strategies to optimise the company's tax position.

    Financial Reporting:

    • Overseeing the preparation of financial statements and reports.
    • Ensuring compliance with accounting standards and regulations.
    • Attesting the accuracy of financial reports including balance sheets, P&L and cash flow statements, to help both internal leaders and external stakeholders understand the financial state of the business.
    • Communicating financial results to stakeholders, such as investors, analysts, and the board of directors.

  • How do you become a CFO?

    Serving as a CFO requires a strong background in accounting or finance, alongside education, and an experienced track record of analysing data to make recommendations on financial and organisational strategy. CFOs require a combination of hard and soft skills, from budgeting and data analysis, to effective leadership and management expertise. Their ability to forecast and offer strategic direction, must be levelled with an ability to advise on industry-specific challenges and opportunities. CFOs go beyond the numbers and requirement of staying on top of technology trends, requiring the art of being an effective leader within the finance field. To achieve CFO level, you will require:

    Educational Background:

    • Bachelor's Degree: a bachelor's degree in finance, accounting, business administration, or a related field is a given. Some CFOs may also have degrees in economics or other quantitative disciplines. • Advanced Degree: while not always required, having a master's degree (such as an MBA) can enhance your qualifications and provide a broader business perspective.

    Professional Certifications:

    • CFOs will often be CPA accredited (Certified Public Accountant): a recognised certification for accounting professionals.
    • There’s also the option to be CFA (Chartered Financial Analyst), with the aid of the or CFA Institute, or (Certified Management Accountant) accredited, established with the IMA.

    Experience:

    • Most CFOs demonstrate progressive career growth across the years. Working your way up through the ranks, taking on roles of increasing responsibility, leads to experience in areas such as financial analysis, budgeting, and strategic planning.

    Leadership and Soft Skills:

    • CFOs require strong leadership skills to guide their teams and collaborate with other executives. CFOs lead teams that cover both accounting and finance, consisting of senior leaders, such as controllers and VPs of finance, and operational staff, from accountants and bookkeepers, to data analysts. • Communication Skills are therefore vital for aiding your team, and conveying financial information to various stakeholders, including the board of directors, investors, and employees. • Strategic Thinking: the strategic role played by a CFO in an organisation takes time to develop. Honing strategic skills throughout your career stands you in good stead for progression.

    Industry Knowledge:

    • Obtain expertise in the industry in which you work. CFOs have a deep understanding of the specific challenges and opportunities within their industry.

    Networking:

    • Build a strong professional network within the finance and business community. Networking opens up opportunities for career advancement and provides valuable insights, from all industries. Discover the latest finance networking and events on GAAPweb, via our dedicated events page.

    Executive Leadership Experience:

    • CFO positions often require executive leadership experience. This could include serving in roles such as Vice President of Finance or Director of Finance.

    Stay Current:

    • Keep up-to-date with industry trends, changes in accounting standards, and developments in finance. Continuous learning is essential in the dynamic field of finance. • Remember that the path to becoming a CFO can vary, and individuals may take different routes based on their unique experiences and career paths. Networking, continuous learning, and a strong track record of success in financial leadership roles are key components of a successful journey to the CFO position.

  • How much can you earn working as a CFO?

    According to our latest salary survey, salaries for CFOs average £111,076 on GAAPweb. It’s important to note that the compensation for a Chief Financial Officer (CFO) can vary widely based on factors such as the company's size, industry, location, and the individual's level of experience. Additionally, other elements of the compensation package, such as bonuses, stock options, and benefits, can significantly impact the total earnings of a CFO.

    47% of CFOs across GAAPweb received a pay rise last year, with 67% working within a hybrid model. The perks continue with 43% of CFOs taking home the highest bonus percentage on site.