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What is expected of a CFO: the CFO job description

You may have been working in the position for years, but do you ever wonder what a CFO (chief financial officer)’s job description actually is?

An article by Forbes magazine reveals that CFOs have bigger roles today than they ever occupied previously. And according to the executives themselves, they like it that way.

““There’s been an evolution in America in terms of the CFO,” said Paul Mandell, chief executive of the Consero Group, which administered a survey of Fortune 1000 CFO job descriptions last year. “The CFO is increasingly being called upon to weigh in on much more strategic decisions involving the company, including everything from transactions to providing assessments of emerging markets and analyses that go far beyond looking at the books and determining whether there will be enough cash to support investment.”

Whether you’re a CFO yourself, if you’re looking for someone to fill the position, or whether you’re looking for a second pair of hands to help lighten your own load, it’s helpful to know what a CFO job description really looks like. Other than inheriting an impressive title and the simultaneous burden of being the last word in financial matters for the company, the CFO job description covers some key areas, which we examine below.

 

  • Board representation: If your company is of a certain size – and even if it’s still a startup operation – a CFO job description is likely to include a duty on the board of directors. You’ll need to sit in board meetings and vote on decisions affecting the future of the company. Your unique insight into the financial whereabouts and future of the business means your input at this level is invaluable. Make yourself heard without alienating those who have different ideas. Strong communication skills in this area are crucial. After all, your role is to work in tandem with other senior management to achieve the long term goals of the company.
  • Duties of controllership: The staff at Investopedia suggest that this is a key component of a CFO job description. The chief financial officer is required to produce accurate and timely historical reports on what has taken place. Managers in the business from the CEO down will be relying on this information to make decisions for the company as a whole. To a large degree, the level of your credibility as a CFO will be linked to how accurately you carry out controllership and reporting duties.
  • Deciding on risk, liquidity and capital structure for the business: One of the most daunting aspects of the CFO job description is knowing that you must decide the levels of debt the company gets into, how it finances its current and future operations, and how much financial risk it shoulders.

 

Related to this is deciding how you will help make money for the business. Where will you invest profits and for how long? When will you pay out dividends to shareholders (if applicable) and how much? The choice is largely yours to make and motivate to the rest of the board.

  • Financial strategy and planning: No one can see into the future with a crystal ball – or so you always thought. But, in the opinion of the rest of the company, you can. A CFO job description requires you to project the financial future of the business. You’re responsible for financial forecasting, and deriving economic models to predict future success in various scenarios. Your input in terms of the financial opportunities for the company will be used to help determine the strategy that the company adopts as a whole.
  • People management: It’s doubtful that you’ll be achieving all of these broad-reaching tasks yourself. Almost without exception, a large portion of the CFO job description is tied up to managing a team. You may have departments reporting to you or just a small team of accountants, but either way, you’ll need leadership and communication skills in order to make your role successful. Because your role is so wide, your ability to deliver on your mandate is connected to your ability to motivate and manage your subordinates and colleagues.

If you’re a CFO, and you’re looking for a second pair of hands to help you fill the spectrum of your job description, The Finance Team can help you derive a solution. We draw from a large network of finance executives with varying backgrounds and experience to assist your company meet its financial needs in a flexible manner.

Photo credit: thegcsc.org

 

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