Why your company needs a CEO and CFO

When talking about the difference between CEOs (chief executive officer) and CFOs (chief financial officer), it’s often about the details. A lot of times it is harder for a CEO to catch smaller details.

Now, in their defense, they are coming up with strategic methods to sustain the growth and well being of the company, which includes everything from administration to sales. That in itself is a huge job, which is why they are the CEO.

CFOs report directly to the CEO and typically handle any financial happenings within the company. Their responsibilities include tracking revenue and expenses, analyzing financial data, and looking at the markets. Also a huge job, but the two jobs are very different.

The CEOs job is to see the big picture. Which means they can sometimes miss the importance of smaller details. For instance, it may not occur to the CEO to keep receipts. And believe me, the IRS wants receipts. They will not just take statements.

Those smaller financial details that really add up in the end are where the CFO shines. CFOs generally have a better understanding of details because they oversee budgets and expenses and also play a role in filing taxes.

For them, the i’s have to be dotted and the t’s must be crossed. The main responsibility they hold is the stability of the finances and implementing financial strategies to grow the company.

A CEO should generally have some knowledge of those details to understand the bigger picture of the business. And a CFO should look at the broader picture to better understand the details. A successful business needs both perspectives.

Although different, both a CEO and CFO carry the responsibility to maintain and improve the company. It reminds me of a leadership quote by Peter F. Drucker: “Management is doing things right, leadership is doing the right things.”

Both the CEO and CFO perform critical functions that require working in synergy to create a thriving and financially solid company.

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