All organizations require a source of income for self-sustainability. The source of organizational income includes trade (profit-making) or donations (non-profit making). As a result, the management of funds is essential as a going concern. Financial professionals in an organization ensure proper and adequate utilization of funds. Here, let’s know about the differences and similarities between CFO VS Treasurer.
A Chief Finance Officer (CFO) is a senior executive in an organization. He oversees the running of the finance and accounting departments in an organization. On the other side, a Treasurer oversees the running of the treasury in an organization. A Treasury is a department responsible for the storage and disbursement of organizational revenue. Let us review further the roles of these two professionals in an organization.
Similarities between CFO and Treasurer
Career Path
Their career is in the financial field. They deal with the financial matter in the organization. They also ensure the proper utilization of resources. They implement appropriate checks and balances to prevent misappropriation of funds. They are skilled in financial management and accounting.
Education
They pursue courses in financial management and accounting. They undertake professional courses in financial management for certification purposes. They also have an understanding of accounting principles and procedures.
Software Applications
They should be conversant with the various financial systems in their field to make their work effective and efficient. The financial software systems used in organizations include Sage, QuickBooks, and Enterprise Resources Planning (ERP). These management systems facilitate quick referencing and accurate reporting of financial information.
Professional Associations
They should be members of a professional body for compliance purposes. These bodies regulate their conduct and methods of practicing the profession. They are required to renew their membership on an annual or periodic basis. The associations help them acquire training and remain relevant in the current business environment.
Financial Reports
They ensure that standard financial reports are prepared and accessible for reference by the senior executives. The reports include profit and loss account, balance sheet, revenue statement, and expenditure statements. They ensure the team members avail these reports on a routine and periodic basis. They also verify the information in these reports before presenting it to the other senior executives. They interpret these financial reports for stakeholders, investors, and senior executives.
Advisory Role
They communicate financial information to stakeholders and senior executives. They explain the implications of the data in the reports they provide. In addition, they give advice based on the results submitted in these financial reports. They facilitate projections and forecasting of the financial status to facilitate planning.
Compliance Management
They ensure adherence to laws and legislation affecting financial practices in an organization. They make sure practicing of professional and moral ethics by team members. They also make sure that staffs and stakeholders comply with rules and regulations regarding financial matters. They develop policies and procedures to guide various financial aspects of the organization.
Staffing
They are involved in the hiring process for their respective team members. The CFO participates in the hiring of all the financial and accounting staff. They also supervise team members as they perform their routine duties. They lead their respective teams to meet either organizational or departmental goals.
Differences between CFO and Treasurer
Chain of Command
The Chief Executive Officer (CEO) and Board of Directors supervise the CFO. He is a senior executive and forms part of the C-level team. On the other hand, a Treasurer reports to the CFO. He ensures structures and systems in the treasury align with the strategic plan.
The CFO participates in board meetings to provide advisory services and interpret financial reports to them. He gives the past, present, and future financial status using data compiled by the various financial teams in an organization. On the other side, a treasurer provides advisory services at a lower level and rarely attends board meetings.
Scope of Work
CFO oversees the entire finance and accounting division. He is in charge of all the finance and accounting staff in an organization. On the other side, financial risk management is a treasurer’s concern. He supervises staff within the treasury. The CFO is in charge of the finance and accounting division, and a Treasurer manages the Treasury department.
Specialization Areas
The CFO deals with all financial and accounting issues of an organization that emanate from all sources, such as budgeting, asset management, approvals, contract management, and reporting. On the other side, a Treasurer deals with risk detection and management. He is concerned with the storage and disbursement of cash for the organization.
Salary Scale
The CFO earns more money compared to a Treasurer who reports to him. In medium and large-sized organizations, the CFO’s average annual salary is $130,000 – $600,000. On the other side, a Treasure earns $100,000 – $300,000 annually. In multinational corporations, the salaries reach millions of dollars per annum to the tune of $5 million – $150 million.
Financial Planning
The CFO is responsible for developing and implementation of strategic financial plans for the organization. He ensures the breaking down of financial strategies into smaller tasks for implementation by his team members. On the other hand, a Treasurer plans for his department or section at a much smaller scale. His plans are tactical and operational. He implements strategic tasks provided by the CFO relating to his role.
Staffing
The CFO participates in the hiring process for all the financial and accounting staff including, a Treasurer. On the other side, a Treasurer participates in the hiring of staff for the treasury department. The CFO focuses on the organization, while the Treasurer’s focus is on the department or section.
Conclusion
A CFO is a senior executive in an organization. He oversees the running of the finance and accounting departments in an organization. He is concerned with developing and implementing financial strategies for an organization. A treasurer oversees the running of the organization’s treasury. He focuses on financial risk management. In addition, a treasurer reports to the CFO in an organization since he is part of the finance and accounts team. They are certified financial and accounting professionals. They work in collaboration to meet financial goals in the organization.
Frequently Asked Questions
1. Who is a Chief Financial Officer?
He is a senior executive who oversees the running of the finance and accounting departments in an organization. He is concerned with developing and implementing financial strategies for an organization.
2. Who is a Treasurer?
He oversees the running of the organization’s treasury. He is concerned with financial risk management.
3. What is a Treasury?
It is a department, section, or location responsible for the storage and disbursement of organizational revenue.
