The role of a CFO, or Chief Financial Officer, initially focused on overseeing and managing the finances of an organisation. However, today it is seen as a cross-cutting common denominator that links every other significant part of an organisation.
In the simplest terms, a CFO is a C-suite member who handles everything regarding cash flow, financial planning, taxation issues and more. In order to become an efficient CFO, you must have a certain level of experience in the industry.
In fact, a majority of the people who end up working in CFO jobs possess advanced degrees and certifications, such as a graduate degree in finance or economics. Some even go a step ahead to pursue specialised qualifications, like a Master of Science in Financial Engineering or a Chartered Financial Analyst (CFA) designation. It also helps to have a background in accounting, investment banking or analysis.
In this article, we will provide you with a detailed overview of the essential tasks that encompass the responsibilities of a Chief Financial Officer and the current CFO salary in India.
Roles and Responsibilities of a Chief Financial Officer
The role of a CFO is multifaceted, involving a broad spectrum of duties that are extremely important for a company’s financial health and strategic direction. Below, we have highlighted a few examples of such CFO responsibilities.
Strategic Planning and Analysis
One of the most significant parts of a CFO’s value to an organisation is their ability to accurately predict potential future outcomes. This includes conducting financial forecasting and modelling depending on the past performance of a business. This process requires them to consider both internal and external factors that carry the potential to affect revenues and expenses.
Internal factors may include HR-related costs, the price of raw materials or sales trends, while external factors usually encompass emerging competitors, technological advancements and shifts in market demands, among others.
As a CFO, it will be your duty to take into account all these factors and monitor them regularly to create any opportunities for profit projections for the CEO and shareholders.
Financial Stewardship and Reporting
Financial reports typically include balance sheets and cash flow statements that help both internal and external stakeholders gauge the economic health of a business. It is the responsibility of the CFO to ensure the accuracy of these statements and guarantee that they are in compliance with the generally accepted accounting principles (GAAP).
In addition, CFOs must compare the financial statements from previous periods to identify any potential changes and trends within the organisation’s performance and financial position.
Financial Risk Management
Yet another one of the most crucial CFO responsibilities includes financial risk management. It is the process of identifying, evaluating and addressing any financial threats that can hamper an organisation’s assets.
As a CFO, you will manage different types of risks, such as operational, credit, and market risks, and ensure that the business is not caught off-guard. It includes various tasks, such as:
- Assessing a checklist of common business risks and determining the company’s exposure
- Simulating different scenarios by modelling their financial impact
- Drafting proper action plans to mitigate significant risks
- Continuously monitoring to detect any early signs of financial trouble in your business
Chief Financial Officer: What is the Average Salary in India?
According to recent estimates, the average CFO salary in India is about INR 20,50,000 per year. However, please note that this is just a tentative figure. This figure can vary depending on numerous factors, such as the candidate’s experience level, the organisation, the job location or the educational qualifications.
Conclusion
Long gone are the days when CFO responsibilities simply included managing numbers. Over the years, their roles and duties have become more dynamic and influential. From financial risk management to effective reporting and strategic planning, the list goes on and on.
In order to succeed in this position, you need more than just a degree. A thorough understanding of the current market, alongside proper leadership and management skills and technical expertise, is also required.
To help you achieve all these, Imarticus Learning offers you the Chief Financial Programme, in collaboration with the prestigious Indian School of Business. This 8-month CFO course is formulated explicitly for C-suite transition and offers numerous benefits, including top-notch leadership coaching, a blended learning format, access to the executive alumni portal and more.
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