CFO stands for Chief Financial Officer, and usually refers to a person in a corporation who directs the corporation’s finances. Related terms include treasurer, finance director or financial director. In corporations large and small, a CFO is needed to handle both the inflow and outflow of cash, and to create reports about spending, balance the books, and possibly direct payroll.

In a small organization, for example a small charity, a CFO would likely make financial reports for each corporate meeting, be responsible for paying employees, and file the company’s taxes each year. The CFO would also be responsible for keeping and maintaining company records on how money is received and how it is spent. For publicly held corporations, these records need to be on hand and made available to the public and/or shareholders when requested.

A CFO in a small business might not even have a degree but would require ability to balance checkbooks and keep good records. Obviously, skill in math is a prerequisite for a CFO. Some CFOs do have degrees in business management or accounting, which make them attractive employees to both large and small businesses. Keeping records of finances, making recommendations about how to increase earnings, and filing quarterly or yearly taxes are all important aspects of the well-run business. Yet in some cases, the CFO title is largely honorary, with most of the actual accounting work done by a professional accountant or a finance department.

In large corporations, the primary duties of the CFO may be to oversee and manage a large accounting department, while coming up with ways to maximize profit to the company. A CFO might, for example, evaluate the way in which employees work to determine the way to most efficiently get work done for the least amount of money. Again, these responsibilities could be shared with other corporate heads or with general managers or lower level supervisors.

The CFO in a large corporation would ultimately be responsible for payroll and income stated on tax returns, so even if other people do this work, the CFO has to check its accuracy. In a very large business, several financial officers may exist to check and recheck accuracy of any financial statements.

The Chief Financial Officer on a board typically has ability to vote on matters of interest to the company. Usually the CFO is an officer of a company’s board and takes part in all board meetings. The CFO may also need to attend meetings for shareholders to explain the financial affairs of the company and financial projections for the future.

In terms of company politics, the CFO usually has equal status to the Chief Executive Officer (CEO). Often, in the US, it is illegal for a CFO to concurrently work as a CEO, even in small corporations. However, small companies with a single worker or limited partnerships do not necessarily need either a CEO or CFO, since they technically don’t have a board. In these cases, the sole proprietor of a business or joint partners might share the responsibility of creating financial reports and filing required tax reports, in addition to running the business.