Although some people think that the CEO and CFO occupy the same position in a company, it is common to have such confusion for those not very familiar with the business world.
Each has different responsibilities within a company, although both are essential to its operation. They are responsible for ensuring that management makes the best decisions for the organization’s future.
The job of a chief executive officer
The CEO of a company is the most important manager of a company; they have the responsibility of overseeing the activities of every area of the organization. They are essential in managing government entities, public corporations, and private or non-profit organizations.
They must keep the company’s director informed about everything that happens, help maximize its profitability, get more market share, and keep the stock price high.
When they manage non-profit or governmental organizations, they have to ensure that the objectives outlined related to the company’s mission are met.
So what does a CFO do?
The CFO’s job is to oversee that finances, and related activities are kept in order; they must be in charge of financial risk management, financial reporting, planning, record keeping, check to sign, and data analysis. A senior manager must notify the CEO and the board of directors about changes or financial situations. They are responsible for all the personnel that makes up the finance department.
They also support the COO in tactical and strategic projects where the company’s profit and cost analysis, ways to raise new funds, management of good budgets, and risk forecasting needs are required.
The difference between CEO and CFO
Knowing the meaning of each position, you can understand a little the differences between each one, but it is necessary to see the role of each one to belong to a company:
Each has key responsibilities
A CEO should be responsible for overseeing the big picture, monitoring the procedures carried out in each department to make sure they are adequate and verify that they can meet long-term goals.
As the SEO of a company, he does not need to be involved in the detailed tasks of the different departments, but he must know the work of each one to certify that it is done efficiently.
He is considered the leader. Therefore, he must encourage productivity to ensure that the company remains in a solid position in the market. The CFO is only responsible for the financial area.
He does not need to supervise other departments besides finance; he is the leader responsible for keeping everything in order, so he can also be responsible for accounting, compliance, budgeting, and auditing. In other words, everything is related to income and expenses.
Each has its strategies
While the CEO is responsible for the overall strategy of the company to achieve the objectives, the CFO is only dedicated to financial systems to maintain good revenues and stay in the market.
The financial executive ensures that cash is always to cover all strategic needs and avoid risk.
Liaise with different professionals
The liaison made by the CFO is with lenders, regulators, banks, investors, and other financial entities. He is the one who will attend meetings with new private investors to negotiate shares or with bankers to acquire new lines of credit.
While the CEO is the public face of a company, he will be in charge of meeting with the press or community leaders. The CEO makes all briefings and speeches.