What does CFO stand for

Behind the abbreviation CFO, which stands for Chief Financial Officer, is the international name of the position of financial director. In most companies, it corresponds to the level of vice president or deputy general director for finance (Finance Vice President).

Sometimes people ask me what is the difference between a CFO and a CEO. Let's see what job titles are used today and for what.

First of all, abbreviated names are used for convenience, it is faster, but also to a greater extent they have come to us from the foreign labor market, where such abbreviations are the norm. The format for writing posts in this form is called CxO.

What is CFO?

CFO is a right hand of the CEO and one of the key executives. It is he who is responsible for managing the company's finances, he is engaged in planning and is fully responsible for controlling the spending of finances and the execution of budgets. His area of responsibility is the financial policy and strategy of his functional area. It is he who, as a rule, is a member of the Board of Directors and takes the place of one of the Vice-Presidents of the Company.

And most importantly, as a rule, CxO managers have more resources and opportunities than just TOP managers. For example, they may be holders of options or shares of the enterprise. They may also have the right to sign and other powers that are not inherent in the Russian-language function.

If you occupy a managerial role or plan to develop to the level of a TOP manager, then it is simply necessary to navigate these abbreviations in order to speak the language of business.

CFO meaning

The CFO (financial director) manages the financial division of the company (if it is allocated in a separate block). Often, the financial director manages the accounting department and the financial control unit. Thus, often the positions of chief accountant and CFO can be combined.

The employees of the internal audit and compliance department, as well as the corporate treasury (i.e., the unit responsible for corporate finance: working with banks, credit institutions, investors, managing liquidity, financial risks, etc.) are also directly subordinate to the CFO.

The CFO is also responsible for formulating the organization's financial plan (or budget) and making pricing decisions, for example. Therefore, as a rule, the budgeting department is directly subordinate to him.

What is the CFO responsible for?

Therefore, the CFO's area of responsibility includes the following areas of the company's activities:

Accounting and financial reporting;Budgeting and financial planning;The financial analysis;Audit and financial control;Financial risk management;Cash flow management;Working capital management (accounts receivable and accounts payable);Tax planning;Management reporting;Attraction of financing and interaction with investors;Asset Management;Insurance.

This list is only a general list and is not final, since the financial director, who is the key figure in the enterprise after the general director, may also be responsible for a number of other issues and projects (depending on the specifics of the company's work), including those related to only directly to the financial, but also to the commercial and administrative sphere. After all, the financial director is directly responsible not only for the current financial result of the company, but also for its strategic development.

CFO Job Responsibilities

Formation of the financial policy of the company;Control over the activities of financial and accounting services;Setting up management accounting and preparing financial statements;Management of the corporate treasury (or the implementation of its functions in the field of planning and control over the movement of cash flows, execution of payments, hedging risks, etc.);Organization and control of the process of financial planning and budgeting;Optimization of the company's working capital (inventory turnover, the speed of receipt of funds from debtors and the fulfillment of the company's obligations to creditors);Planning and monitoring the implementation of the company's credit policy;Analysis of the profitability/efficiency of the company's operations and cost management in order to minimize them;Optimization of taxation;Interaction with internal and external services in the field of financial control and audit, as well as risk management;Attraction of financing, interaction with investors and credit institutions;Formation and implementation of the company's investment policy (optimal use of financial resources, as well as the implementation of the program of capital and other financial investments of the company);Financial and economic analysis of the company's transactions, including transactions for its reorganization (mergers and acquisitions);Improving the professional qualifications of employees of the financial unit;Implementation of complex IT - financial management systems of the company.