A business’s financial structure is a matter for that specific organisation, and no two businesses will operate their financial teams in exactly the same way.
Nonetheless, there is a standard structure that many will follow: a CFO (Chief Financial Officer), a vice president, one or more accountants, and a budget analyst.
Whether the firm in question is large or small, following this structure helps to ensure a business remains financially compliant.
An introduction to the role of the CFO
You’ll notice from our rundown above that the CFO is firmly at the top of a business’s financial structure, and there’s a good reason for this.
The CFO heads the finance department, at the top of the organisational structure. Everyone in the finance department should report to the CFO, and the CFO takes on a great amount of responsibility as a result.
A chief financial officer will take on all planning and guidance regarding the finances of the company, conferring with other department heads – such as HR or marketing – to ensure the business runs as smoothly as possible. As such, this job role requires a detailed understanding of various areas of finance; an understanding that comes with years of hard-earned training and experience.
When you have to create, manage and allocate funds from the company budget – no matter whether this is on a small or large scale – it is a massive undertaking, and not a job to be handled lightly.
This is why, when you’re running a business, you might consider chief financial officer outsourcing services. This way, you will know your business is working with a qualified, talented and keen professional; someone well-suited for such an important role.
Who else will make up a company’s financial structure?
The CFO is always followed by a reliable vice president. The vice president, as with many others in the finance department, reports directly to the CFO.
However, the vice president has much more of a present role working with the accountants in the department, in order to implement the financial plan that the CFO (and other department heads) will have finalised for the continued success of the business.
Beyond the vice president, there will often be one or more accountants in a finance team. Accountants are a vital part of this financial machine, and handle the daily accounting and bookkeeping operations that sustain a business. This can include invoicing, reconciling, paying bills, handling payroll, overseeing VAT, and tracking the company budget. Above all, accountants report any important information to the vice president.
After an accountant, you might find that a given business’s financial structure also includes a budget analyst. In some cases, though, this job role is handled by the accountants themselves. A budget analyst tracks a budget, and analyses areas where company spending could be improved, whether that relates to overspending or underspending.
When potential improvements are identified, budget analysts bring these to the attention of those at the top of the financial structure – such as the CFO. From here, it will be possible for suitable changes to be implemented.
Why not contact the outsourcing experts at Practical CFO today?
The financial structure of a business can be complicated to understand at first, but we’ve hopefully broken it down for you in an easy-to-understand way. The CFO is at the top of the financial chain, and finance departments generally follow the tried-and-tested structure of CFO to accountant: different, diverse roles with equally important responsibilities.
Businesses can only flourish when each role in the financial structure is fulfilled, and the different parts of that financial structure work well together. To learn more about how we could assist with our own outsourced finance director and CFO services here at Practical CFO, why not enquire to our team?