Today’s complexities of corporate world demands you to know each professional role’s basic responsibilities. You should also be aware of authorized personnel to whom you present the work details. Similar is the case while learning who reports to the CFO (Chief Financial Officer) of a business.
Many corporations and their finance departments are curious about the role of their seniors, especially those whose approval is required for relevant tasks.
L&Y Tax Advisors explains who reports to the CFO and which professionals of a firm are obliged to do so.
Who is a CFO?
A Chief Financial Officer (CFO) is a high-level manager in charge of an organization’s:
- Finances
- Business plans
- Compliance
- Risk management
What is the Role of a CFO?
The main role of a CFO is:
- Financial planning and analysis (FP&A)
- Budgeting
- Professional foresightedness
- Ensuring compliance
- Obey accounting rules
- Manage liquidity and capital structure
- Provide monetary advice to the CEO and Board
Read: What are fractional CFO services?
Who Reports to the CFO of a Company?
The CFO is in charge of a number of top finance-related positions in many medium and large-sized businesses. These are usually the:
- Financial controller
- Treasurer
- Head of tax
- Head of internal audit
- FP&A director
- Chief Accounting Officer (CAO)
These professionals help the CFO by taking care of some operational or reporting tasks. This lets the CFO spend more time on:
- Strategic planning
- Risk assessment
- Interactions with external parties
Who Reports Directly to the CFO?
The following jobs usually report directly to the CFO:
- Controller or Financial Controller is responsible for:
- Accounting
- Financial close
- Ensuring accurate records.
- Treasurer manages:
- Cash flow
- Investments
- Banking relationships
- Risks related to liquidity
- Director of FP&A leads:
- Forecasting
- Budgeting
- Scenario modeling
- Performance reporting
- The Chief Accounting Officer (CAO) is often in charge of:
- Accounting standards
- Regulatory compliance
- Governance issues
- Depending on company structure, the Heads of Tax, Internal Audit, Risk Management may also report directly to ensure:
- Oversight
- Independent controls
Read: What is the difference between a fractional CFO and a traditional CFO?
Who Should Report to the CFO?
Based on the size, complexity, and regulatory environment of the organization, the CFO should have clear reporting lines. In smaller companies, multiple jobs may be combined. For example, the controller may also do FP&A or taxes).
In bigger or more regulated organizations – such as public corporations or companies that do business in more than one country – it is best for the following to report directly to the CFO:
- Controller
- CAO
- Treasurer
- Tax
- Internal Audit
Doing so ensures that the CFO can easily and quickly wolves problems with:
- Financial reporting
- Compliance
- Risk
- Capital
- Cash flow
In addition, having the correct direct reports makes people more responsible. It lets the CFO do a better job of:
- Planning
- Governance
- Dealing with stakeholders
The Bottom Line
The personnel who reports to the CFO depends on the size of the organization. To manage money well and efficiently, companies should set up reporting so that the CFO can observe expenditure, risks, and make strategic financial decisions. This makes things more transparent, helps with compliance, and helps businesses develop. We provide the best CFO & business advisory service in Texas, US. Call us now for personalized management of private or professional finances!
