CFO full form. What does a CFO Do. Skillsets to be a CFO

by Vicky Sarin

What is a CFO. CFO full form

Full form of CFO is Chief Financial Officer. A company's CFO is responsible for managing its financial affairs and providing strategic direction regarding financial planning. The CFO may also be responsible for larger organizations' Investor Relations (IR) and Treasury functions.

The role of the corporate chief financial officer has long since transcended its "green eyeshade" constrictions to become a vital force for both the CEO and the board. Strategy, shareholder relations, acquisitions . . . the CFO continues to find new areas for leadership. 

What does a CFO do?

As stockholders make high-level officers more and more accountable for company profitability and growth, the role of the chief financial officer is rapidly changing. Today's CFO must play a much more strategic role and possess broader skills. The CFO must have strategic thinking skills, as well as communication and leadership skills, to put his ideas into action.

A company's CFO is responsible for a wide range of activities, including:

  • Overseeing the preparation of financial statements
  • Developing and implementing financial plans
  • Managing cash flow and EBITDA
  • Negotiating loans and lines of credit
  • Overseeing investments
  • Developing pricing strategies
  • Analyzing financial data to identify trends and risks
  • Providing advice on mergers and acquisitions
  • Ensuring compliance with financial regulations

The CFO's role in the twenty-first century

Quantitative excellence is not enough for the CFO of the twenty-first century. The new CFO is often responsible for negotiating mergers, acquisitions and restructurings and increasing company profitability. To successfully close deals and ensure growth, the twenty-first century CFO must have experience in four vital areas: global finance, operations, management information systems and personnel. To succeed today, a CFO must think strategically and have the communication and leadership skills to execute his strategy.

What are the skill sets of a great CFO?

The skills that are most important for a successful CFO include:

Strategic thinking: 

Corporate strategy is increasingly driven by costs rather than by sales. Firmly rooted in the financial and cash flow fundamentals, the CFO understands how to use available information and resources to move the company toward its mission and goals. 

The CFO has business acumen and is a visionary and strategist who sees the big picture and understands how the parts relate to the whole.

The strategically thinking CFO envisions all the possibilities-both positive and negative. 

As a visionary strategist, he identifies opportunities, eliminates waste and creates value. 

As a damage-control expert, he develops a contingency plan for the risks and takes steps to prevent them. 

When crises occur, he is responsive and minimizes their impact. Thus, credibility is critical.

The CFO's role is first to sit on the boards of the companies in which the group is interested and second to develop and maintain good relationships with bankers and investors. This shows the increasingly strategic contribution that CFOs can make to boards of directors.

We list down 5 top skills which are essential tor finance professional in the CV by 2025. These skills will help a CFO in forming a better strategic view of business.


CFO's ideas are only as successful as his ability to communicate them. As the executive who will guide the company's financial future, the CFO must effectively and persuasively communicate his strategies to the company's CEO, board of directors and other decision-makers. 

As the one who will negotiate and mediate the deals that help the company to succeed, the CFO must orchestrate complex agreements and help all parties reach mutually-satisfactory ends. 

In addition, CFOs are also expected to make the company's operating managers financially literate and instruct them in the latest legal aspects of financial structure and reporting in foreign countries.

CFOs have been leading communication initiatives for years. They have found that communication between top-level management, shareholders and outside financial analysts is the best way to ensure that the business operates at top efficiency.


CEOs and board directors increasingly rely on their CFOs to act as business partners, idea generators and sounding boards for more significant issues. 

CFOs advise their CEOs and boards on how to allocate technical, human and capital resources most efficiently and competitively. CFOs also have more significant contact with vendors and major creditors and are thus more responsible for negotiating contracts and deals. 

The most successful CFOs are those with the most vital leadership skills. Those CFOs with solid leadership skills are most likely to become CEOs.

Today the CFO plays a vital role in increasing shareholder value by initiating new financial performance measures and tying management compensation to shareholder value measures. 

Because it is the CFO's objective to help the CEO and senior operating managers understand how their business strategies will affect the business financially, stockholders look to the CFO to represent their interests and provide the highest return on their investment. Similarly, CFOs feel a responsibility toward shareholders as they lead company initiatives.

How different is the role of financial controller and CFO?

The role of a financial controller is to manage and monitor the company's financial performance, while a CFO is responsible for taking strategic decisions to help grow the company. Typically, a CFO will have a more extensive finance background than a controller and expertise in other areas, such as business strategy or marketing. As such, the CFO is typically responsible for overseeing all aspects of the company's financial operations.

Please read our blog on how to transition from a controller to CFO.

What are the differences between CEO and CFO?

A chief financial officer (CFO) is a corporate officer primarily responsible for managing the company's financial risks. They create financial statements, negotiate loans and investments, and manage the company's cash flow.

A CEO is the highest-ranking executive in a company and is responsible for making strategic decisions that will affect the entire organization. CEOs are typically responsible for setting goals, developing plans to achieve those goals, overseeing operations, and hiring and firing employees.

Are CFO positions and finance director positions the same?

There is some overlap between the roles of CFO and finance director, but there are also some key distinctions. The CFO is typically a senior position with broader strategic organizational responsibilities. The finance director is more focused on managing financial operations within one division or business unit.

Do I need an accounting background to become a CFO?

No, you do not need an accounting background to become a CFO. However, many CFOs have accounting backgrounds because they need to be able to read and understand financial statements.

The role of the CFO is to ensure that the company's financial resources are best used to support the company's strategic goals. This includes managing budgets, overseeing financial reporting, forecasting future revenue and expenses, and ensuring compliance with relevant laws and regulations.

A CFO can come from various backgrounds, including accounting, finance, business administration, and management. However, they must have a strong understanding of financial concepts and how they relate to the overall business strategy.

Closing comments

As the CFO's leadership role with shareholders and senior management continues to evolve, the twenty-first-century CFO will face more significant challenges. In the next decade, CFOs will face several critical issues. 

CFOs will continue to develop skills in managing the dialogue between shareholders and senior management. They will identify what most improves the company's shareholder value. Finally, in the twenty-first century, CFOs will continue to take on a more active strategic role and affect the future of business in the new millennium.

A company's Chief Financial Officer (CFO) is responsible for managing its financial affairs and providing strategic direction regarding financial planning. 

AICPA has released a digital book on the traits of todays CFO, we do recommend anyone aspiring to be a CFO to read this ebook. This ebook can be taken from Eduyush store at Indian pricing.

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