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What Is the Typical Organizational Structure of a Finance Department?

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  • Written By: Kristie Lorette
  • Edited By: O. Wallace
  • Last Modified Date: 13 August 2014
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The organizational structure of a finance department is determined by each individual company, largely depending on whether it is a small, medium or large sized organization. The most typical organizational structure consists of a chief financial officer (CFO), a vice president, one or more accountants and a budget analyst.

The chief financial officer, or CFO, is the head of the finance department, which also means that this person is at the top of the organizational structure. The CFO is not only the boss or the person that everyone in the finance department reports to, but he or she is also responsible for the overall planning and guidance for implementing the plan when it comes to the finances of the company.

The CFO reports to the chief executive officer (CEO) of the company. He or she also works with the heads of other departments, including human resources, manufacturing, sales, marketing, production or any of the other departments that comprise the company. The CFO meets with the heads of all of these departments for planning purposes. Each department has needs for conducting their jobs and the finance department is in charge of creating, managing and allocating funds from the company budget to meet all of these needs.

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The next position in the organizational structure of a finance department is the vice president. This person reports directly to the CFO, and is more involved in working directly with the accountants in the department to implement the plan that the CFO and the other heads of the departments have worked on for running the business.

The next level is the accounting department. The accountants are the ones that handle the day-to-day accounting and bookkeeping operations of the business. This typically includes invoicing, reconciling, cutting checks and paying bills, tracking the company budget and then reporting all of this back to the vice president.

The lowest rung on the organizational structure is typically the budget analyst. He or she may be involved in working out the company budget and the amount of the budget that is allocated to each department in the company. The primary role of the budget analyst, however, is to track the budget and analyze areas where the company may be over or under spending and bringing this to the attention of the accountants and vice president of the finance department so tweaks can be made.

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Discuss this Article

anon332013
Post 4

I work for a one man business, so a lot of this functional organizational structure, process and procedure makes the job frustrating and he gets flattered over it.

SkyWhisperer
Post 3

@allenJo - The reality is that formal organizational structure is more clearly defined in some businesses better than others.

In some companies, I was given a chart. In the smaller companies, I was given next to nothing. The problem with being given nothing is not that I don’t know who the president is; that’s usually easy to figure out.

It’s that I don’t always know who the real manager is. Is it a fellow coworker who happens to have some supervisory roles but doesn’t have “manager” as his title? Is it his boss?

I’ve gotten into some difficult situations in the past because I wasn’t clear on that. I recommend that you know who you report to up front, and the scope of their authority, regardless of title.

allenJo
Post 2

@nony - You bring up an important point. Regardless of titles, different companies have different types of organizational structures. They don’t always fit the neat model described in the article.

I think that the article’s description would tend to describe large corporations more than it would small businesses, but there can be overlapping of duties with people who hold various positions.

I do believe that the analyst, budgetary or otherwise, is the most generic of jobs and can be called upon to fill a variety of roles that the CFO or other accountants would need. Sometimes you need a team of analysts working together, I would think, depending on the size of the organization.

nony
Post 1

I work for a small business, so a lot of this functional organizational structure gets flattened out; there’s less of a hierarchy.

For example, the CFO in our company is the boss’s wife. She performs all the duties mentioned in the article, but of course from our standpoint as employees her most important role is payroll.

I remember when I first started working for the company and I identified her to a coworker as payroll. I was immediately corrected. He reminded me that her official title was CFO and that I should never call her payroll. I guess titles still mean something.

Actually, come to think of it, I believe our administrative assistant helps out with some of the budget analysis mentioned in the article. Our CFO is mainly concerned with the more important accounting functions, including, dare I say it, payroll.

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