Chief Financial Officer: what it is and what functions it has

A modern role that combines administrative, financial, and management control functions. This is the answer to the question of what a Chief Financial Officer (CFO) is. It is a leadership position that requires strong skills and must face demanding challenges. Let’s look at what this professional does and the right path to acquire the necessary requirements for a career in this role: their responsibilities, suitable education, and average salary.

What is a Chief Financial Officer (CFO)?

In terms of hierarchy, it can be said that the CFO is only below the CEO, with whom they work closely and whom they support in the most critical decisions. Being a CFO means covering different tasks and possessing numerous skills, as well as a high level of education.

The Chief Financial Officer is generally known in Spain as the Financial Director, and represents one of the key figures within any modern large organization. Since it is often a leadership role, the CFO position is highly valued; moreover, demand for this type of professional has grown steadily in recent years.

For this reason, anyone wishing to pursue a career in the financial and administrative sector should take the time to understand what a Chief Financial Officer is. The CFO career, in fact, offers strong prospects both in terms of personal and professional growth and, naturally, financial benefit.

CFO responsibilities

Once we have understood in general terms what a Chief Financial Officer is, we can look in more detail at what they do. The CFO is a senior executive whose main responsibilities relate to managing the company’s finances and strictly overseeing all activities traditionally associated with treasury management.

Depending on the size of the organization and the characteristics of the economic sector in which it operates, the CFO’s functions may vary. One of the distinctive traits of this professional role is high versatility and the ability to oversee a wide range of activities that define and influence the company’s financial health.

More specifically, the CFO manages business planning, oversees incoming and outgoing cash flows (cash flow), participates in project development by handling budgeting, expense reporting, investments, and financing. They also deal with risk management and extraordinary financial operations.

Therefore, the CFO plays a strategic rather than operational role, which becomes clear in activities such as defining financial and economic plans and ensuring compliance. The CFO usually holds a Master’s degree in Economics, often with a specialization in corporate finance and/or business management.

In terms of required skills, a CFO is expected to have:

• forecasting ability, to balance short-, medium-, and long-term planning;
• problem-solving, leadership, and diplomacy skills, essential for managing numerous internal and external relationships;
• regulatory knowledge, to monitor company compliance with rules and regulations;
• general market knowledge, especially of the sector in which the company operates;
• proficiency in spreadsheets, data management and analysis tools, and management technologies.

How to become a CFO?

Understanding exactly everything a CFO does is not easy. The wide range of tasks and required skills makes a very high level of education necessary, as well as solid work experience, especially in accounting and finance. The Chief Financial Officer oversees all activities within accounting departments, treasury management, financial planning, and relationships with banks and financial institutions.

Typically, becoming a CFO requires a degree and a master’s in an economic field, such as an Executive MBA or a Global MBA, although humanities backgrounds are also possible when combined with a business master’s degree. This type of education allows students to acquire the skills needed to perform the many functions of a CFO, particularly in auditing, finance, accounting, and control mechanisms.

However, what truly makes the difference in a CFO’s career is learning through practice and experience. In fact, becoming a Chief Financial Officer is often the natural culmination of professional growth within corporate accounting departments. In other cases, such as innovative startups, it may be an entry-level leadership role within the project.

What is the salary of a CFO?

Several factors determine a CFO’s salary, the most important being years of experience, actual skills acquired, and the type of company they work for. The average annual salary of a CFO in Spain is around €43,000, with minimums of about €33,000 for junior profiles in small companies, and maximums exceeding €100,000 for highly experienced professionals or those working in large corporations.

It is clear that the central and highly influential role of the CFO is well compensated. Depending on the company, earnings can reach several hundred thousand euros or even millions, as is the case with CFOs in multinational corporations. Ruth Porat, Chief Financial Officer of Alphabet, the group that owns Google, received an estimated total compensation of around $70 million in 2015. Apple’s CFO, Luca Maestri, earns about $25 million per year, while David Wehner, CFO of Meta, earns around €21 million. In addition to salary, benefits such as company cars, stock options, and pension plans are also included.