What Is A CFO
Noun 1. CFO - the corporate executive having financial
authority to make appropriations and authorize expenditures for
a firm. The Chief Financial Officer (CFO) of a company is the
person primarily responsible for financial planning and
record-keeping.
The CFO typically reports to the Chief Executive Officer, and is
frequently a member of the board of directors.
The role of the CFO has never been more important or more broadly
defined. Today, the finance organization must forge a proactive,
value-added partnership that supports decision-making throughout the
company. Traditional accounting and reporting are no longer the
primary tasks of corporate finance. The CFO and finance area must
transform finance into a shaper of strategy, a source of
decision-making information, and an architect of change. The role
of CFO can differ from company to company depending on type and size
of the business, but one constant is the CFO is an integral part of
the senior management team.
 A good CFO can look at a set of circumstances and identify the risks
and opportunities. They instinctively know what additional input is
needed and where to get it to enable their organization to be in a
position to make superior decisions. The CFO needs the strength to
stand firm even if the message is unpopular. The successful ones
accomplish this without becoming rigid. Tact, negotiation skills,
and well-developed communication abilities are important for CFOs in
building strong relationships both within and outside of their
organization. A CFO must understand the non-financial areas of the
business – financial plans cannot be made in a vacuum. An
understanding of how financial plans will impact the broader
organization and how the functional areas will contribute to the
plans is critical to their success. And, especially in today's
world, a CFO must have credibility – since the CFO is the
financial spokesman and an advocate for the business he or she needs
to be trusted. They must set the standard for ethical behavior
within the organization.
Whether at a small, mid-sized or large business, the role of the
chief financial officer (CFO) in corporate America has changed
considerably in recent years. It is no longer good enough to simply
be the smartest number cruncher in the world. The CFO today has to
be accountable for more than just accounting.
Growing competition, a sharper focus on corporate governance and
technological innovation all play a part in radically changing the
way CFOs impact an organization. The CFO must have an array of skill
sets to survive and thrive. By necessity, a small business CFO is multi-faceted. A good one
has lots of first-hand experience wearing many hats including
administration, management accounting, production, purchasing, human
resources, facilities, contracting, and negotiations in addition to
having strong finance skills. Above all, a good small business CFO
must be business savvy.
What are the characteristics of the 'super CFO'? Among others:
- Deep understanding of the business
- Knowledge of the high tech industry and market dynamics and
operational drivers of success
- Strong analytic focus
- Flexibility
- Communication and team-building skills
- Customer orientation
- Appreciation for change management
Additionally, a solid CFO will have
the skills and the experience to manage several functional areas
within an organization:
- Finance and Accounting
- Internal Controls
- IT
- HR Responsibilities
- Legal
- Customer Service
- Banking Relationships
- External Accountants and Attorneys
- Special Analysis and Reports
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