It is very confusing the number of times one goes into a meeting, interview or even a casual discussion and people, even high profile ones, don’t understand the difference between CFOs and Finance Managers. While the later is to handle everything related to the finance department (same like CFOs) the earlier has a wider scope beyond the boundaries of merely finance function.
A CFO is almost a shadow to the CEO. S/he is the person who would extend his supervision, audit and monitoring over other functions such as procurement, IT, HR and everything else as they all eventually consume resources and have a financial impact on the organization.
And who is better to intervene early as needed but the CFO. They help developing, and closely monitor business plans, KPIs, research economic trends, decide on investment, strategies and many other things that typical finance manager cannot touch by virtue of authority within the organization as well as typical set of exposure and skills that prevent them from doing things beyond regular finance operations.
Finance managers are more transactional, while CFOs are more of strategic. Typical finance manager takes care of day to day finance operations such as accounts, treasury, book keeping, payroll, etc...
CFOs do that too, but also strategic banking relationship development, fund raising, financial branding, suppliers negotiations, credit policies, IT platforms, HR processes and has a finger in each and every other aspect that would affect the organization strategically.
As i've started, one gets called to an interview under the name CFO only to find out that the organization is not actually looking for that, or even ready to have a full-scale CFO. They simply need a transactional finance manager but they don’t know that. A mistake such as
recruiting a heavy weight CFO in such organizations always fires back as collusion start happening as the organizational structure and persona is not ready for a CFO who has the right to intervene in each and every corner to make it better and function more effectively.
To make things even more odd, some organizations do actually need a CFO but try to save some monies by hiring a finance manager as a CFO instead of getting a hardcore one first hand. The problem is that they don’t understand that CFOs always come from multiple functions backgrounds and not only finance, while finance managers know nothing beyond finance function.
They too end up into a catastrophe as they expect too much from someone with very limited exposure, and the end is doomed.
Business owners, BoDs and hiring managers, please
make sure what you need as one wrong choice
