When it comes to managing the financial components of a company, it is essential to understand the nuances between a VP of Finance and a CFO. While the two roles may seem similar, there are distinct differences that can make a big impact on the overall financial health of an organization. A VP of Finance is responsible for making sure the financial operations of a business are running smoothly while a CFO is responsible for developing long-term financial strategies and overseeing the entire financial operations of a company. In this blog post, we’ll explore the roles of a VP of Finance and a CFO, the differences between them, and how to maximize the use of each role to benefit the organization. With this knowledge, you’ll be better equipped to make the right decisions when it comes to the financial strategy of your business.
VP of finance salary and job outlook
An executive of a business or organization who establishes significant goals and objectives to enhance the financial department and revenue generation is known as the chief financial officer. They frequently collaborate closely with a company’s CEO and COO to forecast revenue and expenses and determine whether the business has the cash on hand to fund specific projects or if they need to find additional funding. The CFO frequently meets with donors or investors to secure additional funding, or launches company campaigns to boost sales, if necessary.
During their career, a CFO often fulfills several responsibilities, including:
What is a VP of finance?
An individual who oversees a company’s or organization’s financial department is known as a vice president of finance. They also assist companies in achieving their long-term financial objectives by reviewing their goals, estimating the resources required, and setting up a strategy to realize the company’s ambitions. In order to help the CFO and other executive members of an organization understand which goals are realistic, the VP of finance will frequently collaborate with them. He or she will highlight the key risks or benefits of each project.
A vice president of finance has a variety of duties throughout their career, including:
CFO salary and job outlook
Vice presidents of finance and chief financial officers frequently concentrate on different areas of an organization’s operations, despite the fact that the positions occasionally perform similar duties. A VP of finance will typically report directly to the CFO and assist them in achieving objectives to increase revenue or secure funding for significant company initiatives and campaigns. The VP will also concentrate on the regular business operations, such as overseeing the payroll system and ensuring the accuracy of financial reports.
The CFO is frequently more involved in a company’s or organization’s financial future by concentrating on how to support the business’s success, understanding how rivals run their businesses, and being aware of current market trends. The CFO may occasionally represent the company at public gatherings or functions, making connections with business leaders and cultivating relationships with shareholders and investors. It’s also possible that in smaller businesses, one person may share the duties of the CFO and vice president of finance because the company isn’t yet big enough to need two separate employees.
Here are some additional differences between the two roles:
Job qualifications
Additionally, a CFO and vice president of finance share many similar job requirements. It’s even conceivable that a vice president of finance will eventually become the CFO. Typically, a person who wants to pursue either career must obtain a bachelor’s degree in a related field, like finance, marketing, or business, at the very least. A master of business administration (MBA) or a master of finance (MFA) degree is one option for many executives and financial managers, though.
Chief financial officers and vice presidents of finance also have a lot of experience in special fields like accounting, marketing, and investing that can give them a broad understanding of finances to aid in the growth of businesses. Each professional should strive to gain managerial or leadership experience, as this will enable them to manage a finance team in the future.
VP of finance and CFO skills
The following is a list of abilities used by both a VP of finance and a CFO in their careers:
Analysis
It’s critical for both the CFO and the VP of finance to have strong analytical skills when developing new business objectives, forecasting quarterly revenue, or creating the company’s annual budget. The CFO can better understand what the company needs to develop by examining previous data or current market trends, and the VP of finance can give executives advice on how to meet their current goals.
Risk management
Risk management expertise is crucial because it enables financial professionals to comprehend the difficulties or risks associated with launching particular business projects and campaigns. The vice president of finance and chief financial officer might advise the company’s executives to find a more stable marketing project, for instance, if a new marketing campaign runs the risk of costing the company significantly more money than it would make.
Communication
A vice president of finance frequently performs duties that require effective communication, such as relaying crucial financial information to executives, interviewing and supporting the finance department staff, and presenting financial reports to investors. In addition, a CFO needs effective communication abilities to interact professionally with shareholders, discuss plans for company projects and goals, and write memos or statements for the finance team and other staff members.
Episode 17 – Interview with CFO/VP of Finance
FAQ
Is VP of Finance same as CFO?
CFOs are more involved in a company’s strategic financial future than vice presidents of finance, who frequently manage the company’s finances on a day-to-day basis. Although these roles are somewhat similar, they have various daily responsibilities and degrees of strategic involvement.
Is a vice president higher than a CFO?
Senior managers, such as CFOs, typically hold higher organizational positions than a vice president, or VP, so which is superior? However, the CFO may occasionally be referred to as a senior or executive VP.
Is a VP Finance lower than CFO?
A VP of finance will typically report directly to the CFO and assist them in achieving objectives to increase revenue or secure funding for significant company initiatives and campaigns.
Who does VP of Finance report to?
A vice president of finance may directly report to the president, CEO, or CFO of a company, depending on the organizational structure. They are in charge of processing an organization’s financial transactions in order to increase profits and prepare for future expansion.
