CFO and Director of Finance. When the two words flash on the screen the first reaction of every candidate would be, “Aren’t they the same terms, phrased differently”. Well, the answer is a big NO! See CFO vs Director of Finance.
Well, it is not your fault. Almost every newbie in the financial industry or any new industrial candidate can get confused with the words. Though both the positions perform near-about the same duty, there is a whole lot of difference when it comes to the hierarchical structure of both the positions in a company.
A CFO is an executive-level position that deals with the financial operations of the company, whereas the Director of Finance does not make top-level management of the company, but works with the financial operations of the company.
Let us understand more about both the positions, in the further sections.
Who is CFO?
CFO or Chief Financial Officer refers to a senior executive level financial officer. A CFO deals with all the financial tracking of the company and maintains the cash flow of the organization. They work in proximity to the CEO and inform them about the financial performance of the company.
Apart from that, they work in managing losses and improving the performance of the revenue generations. A CFO is responsible for several duties and the duties can differ according to the structure of the organization. A few of their duties involve deriving tax strategies, implementing the business plans, researching the economical trends, identifying the revenue, and forecasting functional objectives.
Roles and responsibilities
- A CFO is responsible to look after a lot of accounting teams and manage the working of the same. They are responsible for providing leadership and the right direction to the finance department and drafting policies that add financial security to the organization.
- Drafting reports on financial plans and conveying them to the CEO to draft the future financial plans.
- Give strategic recommendations to the financial team and manage the budget.
- Drafting policies that help secure the financial revenues of the organization in the long run.
- Developing relations with external teams and supervisors to understand the market and look out for potential risks that can harm the structure of the organization.
Skills
The basic educational qualification required to apply for this position includes.
- A bachelor’s degree in either Accounting, Finance, Economics, or any other field of study.
- MBA and CPA are highly desirable for the position.
A person needs to be extremely skilled and have a lot of experience in the field of finance to achieve this position.
Other skills required for the position include:
- Great with analysis to ensure effective partnership among businesses.
- Able to take risks and draft plans that can benefit the company in the long run.
- Adaptable to new trends and technology to keep up with the ever-changing world.
- Great Verbal and Written communication skills to manage several teams.
- Comprehensive knowledge about management.
- And so much more.
Average salary
The average salary of a CFO is reported between $137,294 to $200,560 per year.
Who is the Director of Finance?
A Director of Finance is responsible for looking after all the financial planning and operations of the company. The position settles a little lower in the hierarchy of the organization, but the powers with this position are extremely peculiar.
A Director of Finance needs to be extremely analytical and ensure that all the financial tasks of the company are carried out without any hindrance. They also look after drafting financial reports and assessing the market to ensure that the company stays at war with the industry.
Some major tasks associated with this position include establishing targets, developing budgets, and performing financial analysis.
Roles and responsibilities
- Helping the CFO deliver Business Review on different platforms and draft appropriate financial plans according to the directions provided.
- Helping the finance team manage accounts and leading the team whenever necessary.
- Looking after the budgets, forecasting, and planning on the financial teams and reporting them to the CFO.
- Handling the treasury of the organization and looking after banking relationships, and cash management.
- Look after internal audits, tax controls, and other financial stakes of the company.
Skills
The basic educational qualification required to apply for this position includes.
- A bachelor’s degree in either Accounting, Finance, Economics, or any other field of study.
- MBA is preferred for several positions.
- A Master’s level degree with a concentration in finance and economics can add great value to your resume.
The minimum experience you would require to apply for this position is 2 to 3 years in the finance team. With the right skills, you can ace the position within a certain year.
Other skills required for the position are:
- Adaptable to the changing industry standards. It helps them to draft plans that meet the current requirements of the industry.
- Influential, this allows them to stand out in the team and bring out positive results from the team.
- Strong analytical skills to analyze the business strategies and draft revenues that help the organization in the long run.
- Written and Verbal communication, to communicate among teams and draft successful plans.
- And so much more.
Average Salary
The average salary of a Director of Finance is reported between $114,660 to $150,568 per year.
Conclusion
The major difference between the position of CFO and a Director of Finance is the level of seniority of the position. A CFO is an executive-level position that is responsible to translate all their plans and report their work to the CEO. On the contrary, a Director of Finance accompanies a CFO to draft the financial plans and communicate among the financial teams.
The second major difference that comes into play along with hierarchy is the years of experience required to achieve the position. A candidate will be required to have at least 10 years of experience to grab the position of the CFO, while the years of experience required for the Director of Finance ranges from 2 to 3 years.
In the end, the Director of Finance can be termed as the position that acts as the stepping stone to receive the position of a CFO.
