Chief Financial Officer: be aware of its duties and significance

Within a corporation, the Chief Financial Officer plays a number of crucial duties. He or she has many duties and plays a key role in business decision-making and financial oversight.

With this, you become one of the protagonists of strategic business management , which requires your activities and their effectiveness. Today, learn more about your role and the skills you need to perform it.

What is Chief Financial Officer?

Chief Financial Officer or CFO is the financial director of an organization, which may or may not be a company. His or her role is to assist in strategic and financial management, which encompasses a series of tasks.

What duties does the Chief Financial Officer have?

The CFO has numerous responsibilities and each of them encompasses specific activities. Find out what they are.

Financial management

The CFO has an important role in financial management , which is natural, as he is the financial director.

The Chief Financial Officer is in charge of managing day-to-day financial operations in management. Additionally, he or she must create and execute internal financial policies that maximize resource utilization and management.

Financial reports

The CFO is responsible for preparing and presenting financial reports to managers, shareholders and potential investors. Therefore, he also has a role in the company's image and its value.

To do this, he must work to ensure that the document complies with accounting regulations.

This is a responsibility that can be optimized with the use of modern software, equipped with AI. With them, it becomes possible to read and interpret countless data quickly and accurately.

Financial planning

Another responsibility of the Chief Financial Officer is to carry out the company's financial planning . He or she must develop short, medium and long-term strategies and plans. 

Therefore, he must make financial forecasts – according to the company's health, its niche and market trends – and budgets.

It is important to highlight that in this role, the CFO must continually review these strategies and the ways in which they are being put into practice. Thus, he must adapt them according to the moment and the company's objectives.

Strategic decision making

The CFO is also involved in strategic decisions. This is precisely because they involve the company's values ​​and financial disposition. 

Risk management

The Chief Financial Officer must manage the risks of operations and specific market moments. In fact, he must not only be aware of them, but also act to avoid them. 

Financial team management

One of the duties assigned to the CFO is overseeing the finance team. He or she is therefore in charge of overseeing the accounting and treasury divisions.

Compliance and ethics

The Chief Financial Officer has the duty to act in accordance with financial and accounting rules. Another of his/her responsibilities is to ensure that teams and the company, in general, also act ethically.

Therefore, it must promote ethical actions, as well as ensure that internal monitoring and reporting channels function correctly. 

Investor Relations

Finally, the CFO must also maintain a relationship with investors in order to attract and retain them. To this end, he or she must participate in industry events and promote the company financially.

How important is the CFO in a company?

The Chief Financial Officer is essential to the proper functioning of the company. This is already clear from his list of responsibilities, which is quite comprehensive.

The CFO works towards the financial stability of the company, as he contributes to its balance and sustainability. He is also the one who foresees risks and must avoid them, as well as acts to attract more money to the corporation.

What qualifications are necessary for a Chief Financial Officer?

The CFO's responsibilities are diverse. This makes him/her crucial to the company. It also means that the professional must have a series of skills to be able to carry out his/her responsibilities. These are:

• Integrated vision of the business, in order to understand the activities, objectives and needs of all sectors. This is important for decision-making and resource management;
• Understanding the market and the business in which it operates, something essential for the development, practice and adaptation of strategies;
• advanced understanding of finance, along with expertise in accounting and analysis;
• leadership, since he is in charge of overseeing the whole financial group;
• Effective communication to understand the needs of different sectors and share strategies. This is also important to understand the ideas of the teams, as well as to work with investors to sell the company's image and attract them;
• Strategic vision that aligns actions with business objectives;
• Ability to interpret highly complex financial data;
• Emotional intelligence ;
• Adaptability, especially in the face of market changes and public behavior.

What is the difference between CEO, CFO, COO and CIO?

These four acronyms are often confused, which is due to their similarity. However, you should know that these are four different names that, in turn, represent four different professions and activities. Learn more about what each leadership acronym means !

He is responsible for leading the company and holds the highest position in the hierarchy. It is his responsibility to represent the company and pursue its goals.

The COO is the Chief Operating Officer, or director of operations. This is a professional whose activities focus on the company's daily operations. As such, he or she must ensure its effectiveness and implement operational strategies.

Furthermore, the CIO is the Chief Information Officer, corresponding to the director of information technology. He works directly with the technological side. 

The CIO develops technological initiatives while searching the market for new technologies that can contribute to the company and its objectives. He is also responsible for cybersecurity and its implementation. 

Therefore, these are different roles from those performed by the Chief Financial Officer, who works in the field of finance. 

Despite this, the efficiency of the company's operations and the achievement of its objectives will always depend on the alignment between these directors.