A Glossary of Key Finance Team Roles & Responsibilities
The precise differences between seemingly similar finance roles can be tricky to figure out. To many, a Finance Director and a Head of Finance might appear to be the same thing. And to complicate matters, sometimes they can be.
Evolving job descriptions and company structures have meant that, sometimes, the job is what you make of it. But even so, there are typical expectations for each of the key finance team positions, and a few ways they’re distinguished from one another.
Below is a glossary of job descriptions for accounting and finance teams. You’ll find common and valued positions, with definitions and descriptions of their core responsibilities.
Note: This glossary will be continually updated, improved, and expanded upon with input from our community — so please send any feedback or criticism you might have to firstname.lastname@example.org
The role of CFO
In a typical large organization, the Chief Financial Officer (CFO) is the highest-ranking finance officer in the company. Hierarchically speaking, they rank third, behind the Chief Executive Officer (CEO) and Chief Operating Officer (COO) - again, in a typical hierarchy.
In smaller companies, these roles are sometimes combined into a CFOO - Chief Finance and Operations Officer. This person oversees both the financial and operational aspects of the business. Given the complexity of both roles and the scale of responsibilities, the CFOO role is increasingly uncommon.
Depending on the size and structure of the company and its finance team, a CFO’s duties can range from more mechanical duties like booking invoices and paying employees, to high-level strategy and business planning.
But once the finance function is built and the operational aspects are taken care of, the CFO will focus on:
- The company’s overall financial strategy
- Investor relations and shareholder reports
- Structure and performance of the wider corporate services unit, finance, including human resources, and talent acquisition
- Managing the company’s investment portfolio
- Broad strategies to increase profits and reduce losses
The changing nature of this role
At one time, the CFO was simply the company’s highest ranking accounting and finance expert. They had very strong technical skills, and focused most on mitigating risk and ensuring compliance, and left much of the business strategy to other executives.
In recent years, the emphasis has shifted to position CFOs as true business partners. While they certainly need strong financial principles, it’s their ability to grow the company financially that counts.
And there will usually be other team members to focus on the minutiae and get the numbers right. We’ll meet them later in this article.
How to become a CFO
We don’t have time in this article to explore the CFO career path in full. There are in fact many paths to reach this position, each with substantially different steps along the way.
The role of VP Finance
As we’ll explore shortly, the core tasks for a VP Finance are often not far from those of a CFO. They also have to oversee the financial health and efficiency of the company, and have an important strategic and procedure role to play.
What does a VP Finance do?
The key responsibility of a VP Finance is to build and manage a strong finance function within the business. They need to ensure that data is accurate, risks are managed well, and reports are delivered on time.
In smaller companies, the VP Finance may do the same role as the Finance Director or even CFO. The overall “Head of Finance” may have any of these names, depending on how the business chooses to structure itself. But when both CFO and VP Finance are in place, there are generally a few key differences between the two roles.
VP Finance vs CFO
The difference between a VP Finance and CFO isn’t always abundantly clear. Both are senior finance roles with significant strategic responsibilities. And in plenty of companies, the two roles either overlap or are merged completely.
But while there are no hard and fast rules, here are some general differentiators:
Inward- vs outward-facing: The CFO is usually the public face of the finance team. The report to the board and investors, give interviews, and fulfill a more “political” role. And while inward-facing CFOs are common, the VP Finance is more likely to manage day-to-day operations.
Visionary vs operational: As just mentioned, the VP Finance is typically in charge of overseeing finance processes, putting controls in place, and pushing the team towards its goals. The CFO performs their role more as the company level, with an eye on the bigger picture.
In the end, the biggest difference between the CFO and VP Finance is seniority. The CFO is part of the C-Suite, right next to the CEO. Younger companies will often choose to embed a Finance Director or VP Finance rather than a “CFO” - even if the responsibilities are the same - to reflect the status required.
The role of Finance Director
Also known as: Head of Finance; Financial Director; Chief Financial Officer (in some cases)
As we’ll see, it’s not always simple to define the role of Finance Director. As a result of evolving language, this job title has mixed somewhat with CFO.
So let’s start with that exact issue:
CFO or Finance Director?
Here’s an interesting example where the differences between two roles can either be completely real, or just a matter of semantics. For some, the two terms are synonyms. Wikipedia even states that “in the United Kingdom, the typical term for a CFO is finance director (FD).”
Which in many traditional companies may still be the case.
But as business language internationalizes, and “CFO” becomes more popular worldwide, there does still seem to be room in many businesses for a separate Finance Director alongside the Chief Financial Officer. So what’s the difference?
“In organisations where there is a CFO,” writes EFM, “FDs have similar responsibilities to CFOs, but are not part of the senior executive team. Their role is to oversee and direct the company’s financial operations and report to the CFO. They strive to create a solid foundation upon which an organization can grow.”
So while the areas of responsibility might be similar, they’re more likely to focus on internal structure and performance, while the CFO may be more outward-facing, dealing with board members and new investments.
What is the role of a Finance Director?
When there’s a separate CFO in place, the role of Finance Director is similar to that of VP Finance. They need to build robust finance processes and ensure that the company operates smoothly and efficiently.
Great Finance Directors have an operational mindset. They’re willing and able to manage the company’s accounts, financial information and key relationships, and make critical decisions to improve all of these.
Qualities of a Finance Director
As a high-pressured leader, the Finance Director role isn’t for everyone. But according to BTG Recruitment, these qualities make for great Finance Directors:
- Excellent communication skills. You need to build and maintain trust, and clear communication is the best path forward.
- Attention to company cash flow. Naturally, the company relies on you to keep it in a sound financial position.
- Commercial knowledge and insights. More and more, it’s vital for finance leaders to support growth and keep revenue flowing.
- Relationship building. The better a company works with and understands its finance team, the better for everyone.
- Courage. Especially in startups, great finance leaders can move out of strictly risk management and into a growth mindset.
These qualities really apply across executive finance positions. Companies are looking for experienced leaders who bring more than numbers wizardry.
The role of Finance Manager
Also known as: Financial Manager; Finance Analyst; Business Analyst
Here’s another position where we have to make a clear distinction. In the private world, a financial manager takes care of a household’s financial portfolio. Your family may hold shares or other investments, and your financial manager is there to oversee these.
And in a way, it can be very similar in business. Finance managers are there to manage cash and investments on the company level. And a crucial aspect of this role involves helping individual teams manage budgets.
As Chron writes, “the finance manager might work with various departments to help them find cost savings or recommend that they be given a bigger budget, based on the company’s overall performance. In some instances, the finance manager simply recommends departmental budgets to an owner, executive team or board of directors… In some hierarchies, department heads may not go over the head of the finance department and must accept this approved budget.”
Finance manager competencies
Clearly, the role suits those with a sound financial background. You need to know how to build budgets and forecasts, and find ways to optimize corporate spending.
The role usually comes down to some mix of:
- Preparing financial reports and forecasts
- Handling cash assets and analyzing investments
- Monitoring credits and ensuring collection
- Tracking outgoings to keep debts in check
In many ways, the Finance Manager does the more hands-on version of the CFO or Finance Director’s role. Whereas those leaders need to think big-picture and develop strategy, the Finance Manager executes tasks and fulfils the management’s vision.
The role of Financial Controller
Put most simply, a Financial Controller is the company’s chief accountant. They ensure that transactions are booked correctly and on time, and manage the accounting function within a business.
For this reason, the Financial Controller is often ultimately responsible for company spending. Not necessarily setting budgets and managing cash flow, but rather the hands-on management of credit cards and expense claims.
The difference between a Finance Manager and Financial Controller
There’s a broad distinction in finance teams between financial planning and analysis (FP&A) and controllership. Financial Controllers are concerned mostly with transactions - how money comes in and out of the business on a practical level.
Conversely, Finance Managers create plans, draw up budgets, and think about how to optimize that same money coming in and out. So while one cares about the individual transaction, the other thinks more about how to get more from the company’s transactions as a whole.
As a clear example, a Finance Manager might work with your marketing team to decide how much they should spend on social media advertising. But a Financial Controller will ask them for receipts for advertising spending, and will ensure that each transaction is recorded correctly.
A Corporate Treasurer is seen as the company’s financial “guardian,” protecting it against risks. The role typically exists in large, multinational corporations, particularly those with exposure to credit and currency risks.
Traditionally associated closely with accounting teams, corporate treasurer is now often a team in its own right. And the more complex and existential the potential for financial risk, the more a company should consider adding a Treasurer.
In smaller companies, CFOs and Financial Controllers adopt much of this role. But as the company grows and potential for risk increases - particularly externally - it may be necessary to add a dedicated person or even company department.
Corporate Treasurer job description
Essentially a risk management expert, the Corporate Treasurer role includes:
- Overseeing company cash flow
- Managing cash reserves and converting currencies to minimize negative exposure
- Making funding and refinancing decisions
- Analyzing budgets to ensure that projects and expenditure are beneficial
- Close dealings with the company’s bank(s)
- Monitoring corporate investments
- Identifying potential financial risks and taking measures to prevent them
The Treasurer’s competencies
The role mainly requires expertise in corporate risk management. The most important forms of financial risk include liquidity risk, credit risk, currency risk, interest rate risk, and operational risk. The first four are external risks, and the Treasurer will need to understand acutely how markets and wider economic conditions affect the business.
Operational risk is an internal consideration. The Treasurer needs to analyze processes within the company to ensure that they won’t lead to financial issues or a loss of company value.
To do this well, Treasurers need a strong understanding of corporate risk. But they may also need a practical knowledge of tax and insurance law and regulations, accounting, economics, and banking.
The role of Accountants & Bookkeepers
Also known as: Accounting Manager, Accounts Clerk
A company’s accountants are responsible for keeping accurate financial records for the business. Specifically, they need to ensure that all company transactions are legitimate, legal, and recorded correctly, and can be referenced in an audit.
This involves a high attention to detail, and the ability spot anomalies in transactions and supporting documents. Modern accounting automation software has removed many of the more tedious, repetitive tasks involved, but these skills are still essential. And while it's usually not compulsory for small companies to have a registered accountant, it is compulsory to keep financial records.
Of course, there are a wide variety of accounting roles, including roles in government agencies, auditors, and niche specialties. But in this section we’re talking about generalist corporate accountants.
Even so, there is one key distinction to address.
Internal vs outsourced accounting
When companies are small and/or young, most accounting is outsourced to consultants. The low volume of transactions means there’s no need for someone in-house, full time. Contracting an external accountant for a few hours or days per month is far more cost effective in these circumstances.
But as the number of transactions increases and becomes more complex, many businesses bring these services in-house. This way, you have specialized help that understands the business intricately. Plus, paying consultants to essentially work full time quickly becomes very expensive.
There are some specific tasks that are virtually always outsourced, including audits. These need to be done independently, and are usually executed by well-known, reputable firms.
The role of Payroll Manager
Related positions: Payroll Clerk, Payroll Assistant
A Payroll Manager is primarily responsible for making sure that staff are paid on time and in the correct amount. As part of this aim, they provide detailed payslips and give employees access to their pay information when necessary.
The Payroll Manager job description also includes:
- Calculating payroll taxes and sharing necessary information with employees come tax season
- Identifying and resolving pay-related issues
- Setting up automation systems
- Keeping clear, accessible records
Previously, this role involved a high degree of manual processing. Paper paychecks had to be prepared and distributed - often by mail. Today, electronic banking and cloud services have meant that many payroll tasks are completely automated, while others simply require oversight. In many SMBs, payroll is incorporated into other human resources tasks, and the need for a distinct Payroll Manager has disappeared.
Different payroll positions
The difference between Payroll Managers, Clerks, and Assistants is really a matter of seniority. All deal with the payroll function, but the Manager will ultimately be responsible for the full process, while a Clerk or Assistant will handle discrete steps or focus on certain business units. The Manager may of course also manage other members of the payroll team.
Purchasing or Procurement Manager
Also known as: Purchasing Agent, Procurement Officer, Buyer, Supply Chain Manager
In companies with a centralized purchasing function, the Procurement or Purchasing Manager oversees buying for the company. Whenever new stock, supplies, or technology are needed, a request goes through the Procurement Manager who assesses, approves, and executes the purchase.
This is more than simply looking through a catalogue and choosing the cheapest option. A Procurement Manager’s responsibilities include:
- Identifying savings due to seasonality or buying in bulk
- Negotiating further savings
- Managing suppliers to maintain healthy relationships
- Handling shipments and tracking inventory to prevent from running out of stock
- Processing purchasing orders from team members and ensuring the system runs smoothly
Overall, the role requires creating repeatable processes that ensure efficient, cost-effective buying.
Procurement vs Purchasing Manager
Procurement versus purchasing is often a distinction without a difference. Many companies simply use either term to mean the same thing.
But technically, the two aren’t exactly synonyms:
- Purchasing Manager: Processes and executes purchasing orders, basically moving a transaction from request to fulfillment.
- Procurement Manager: Builds the purchasing process, looks for efficiencies, finds and negotiates with suppliers.
So in short, purchasing is a precise part of the wider procurement process. And therefore Procurement Managers have a wider (and often more senior) scope than their colleagues in purchasing.
Learn more about careers in finance
As we’ve seen, finance positions are rarely uniform. Depending on the company you join and the expectations placed on you, your role and responsibilities can evolve quickly and unexpectedly.
All you can do is arm yourself with knowledge, and be ready to evolve with them.
For those already in finance positions wanting to level up and build their skills, join our workshops and webinars. Leading CFOs from Europe and the US teach us how to build finance teams and provide services that really make a difference.
And you can read more from those leading CFOs in our playbook, dedicated to art of succeeding as a startup CFO: