Senior management titles in
finance mostly get mangled. There is no clear understanding of the roles
performed by similar
management positions. However, every one of them has a clear role and every
role is differentiated in terms on responsibility and authority. A director of finance job is different
from VP of finance job. Most
misunderstood positions are that of a CFO and VP finance.
Role of VP Finance
VP finance ensures that all
financial controls are in place. All book of records and reports are prepared
under his directions. He ensures all records are accurate and timely. He keeps
strict control on company’s finances. He summarizes and foresees company’s
financial position and ensures adequate staffing of accountants, clerks and
finance managers. He also oversees budget, audit and accounting departments. Finally
a VP or VP Director of Finance jobs
ensures that all wheels are on the bus and organization is functioning
smoothly.
An organization needs a CFO
when all its financial functions and procedures are in place and it looks
forward for a deep financial strategy. CFOs are largely about organizations
future endeavors. CFOs provide a strategic outlook and financial framework for the
organization. They are accountable for
accuracy of financial reporting. CFOs handle mergers & acquisitions and
manage relationships with investors. They help in meeting organizations financial
budget, goals and objectives.
When should an organization hire VP Finance and a CFO?
VP Finance ensures that all
financial functions in organization are accurate and timely. Organization needs
VP Finance in its day to day functioning. If an organization can afford VP
finance, it should hire one immediately and he will ensure that all finances
are in place. CFO needs a meaty role and interesting business. If an
organization does not have an expansion or growth plan it does not require
expertise of a CFO. Rather organizations should hire a CFO when it wants to go
more strategic and is looking for overseas expansion. VP handles inside of the
organization whereas a CFO handles outside functions.
In summary, VP finance improves
efficiency and avoid financial risk and a CFO effectively manages functions and
strategically leads organization for growth.
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