Chief financial officers · the role
What does a CFO do?
The short answer · updated
A chief financial officer (CFO) leads a company’s finance function. The CFO owns budgeting, forecasting and financial reporting, cash and funding, financial controls and risk, and tax compliance, and reports on all of it to the CEO and the board. In many smaller companies the same role is called finance director.
What a CFO is responsible for
The ICAEW describes the CFO or finance director as the most senior role in the finance function, overseeing all of it and providing strategic direction and leadership. Its list of typical tasks is a fair picture of the job:
- leading and mentoring the finance team;
- overseeing budgeting, forecasting and financial planning;
- identifying financial risks and putting measures in place to reduce them;
- reporting to the board and dealing with external stakeholders such as investors, lenders and auditors;
- overseeing investment strategy, and leading on mergers, acquisitions, disposals and capital investment;
- making sure the company complies with financial regulations, standards and its own policies.
The numbers the CFO owns: records, accounts, tax and controls
Behind the strategy sits a set of legal obligations. Every company must keep adequate accounting records under section 386 of the Companies Act 2006: records that show and explain its transactions and disclose its financial position with reasonable accuracy at any time. The CFO runs the systems that keep them.
From those records come the statutory accounts, which go to shareholders, Companies House and HMRC with the Company Tax Return. They include a balance sheet, a profit and loss account and notes, and the balance sheet must be signed by a director. The CFO prepares them; the board approves them.
In larger companies, HMRC’s Senior Accounting Officer rules require a named director or officer with overall responsibility for the company’s financial accounting arrangements to make sure they allow tax to be calculated accurately. That person is usually the CFO, and the responsibility cannot be handed to an outside adviser.
Listed companies face more. The FRC’s UK Corporate Governance Code 2024 now asks boards to declare whether their material internal controls are effective (Provision 29), and the CFO builds and evidences much of what that declaration rests on.
Who a CFO reports to: the CEO, the board and the audit committee
A CFO reports to the chief executive, and often sits on the board as an executive director. The CFO presents the numbers at every board meeting: performance against budget, cash, forecasts and financial risks.
Where the company has an audit committee, the CFO also works closely with its chair. The committee, made up of non-executive directors, reviews the financial statements, internal controls and the external audit, so the CFO answers to it for the quality of the numbers. The financial controller, in turn, usually reports to the CFO or finance director.
A CFO who is a director owes the general duties in sections 171 to 177 of the Companies Act 2006. Companies House guidance notes that the duty of reasonable care, skill and diligence rises with the director’s qualifications: a qualified accountant must use that knowledge. In banks, insurers and other regulated financial firms, the chief finance role can be a senior management function in its own right (the FCA lists Chief Finance as SMF2), which needs regulatory approval before appointment.
Fractional, interim and part-time CFOs vs a permanent CFO
A permanent CFO is employed full-time with no fixed end date. It suits a company whose finance function, investors or regulators need a senior finance leader every day.
An interim CFO works full-time for a fixed period: a fundraise, a sale, an audit or systems problem, a turnaround, or cover while the permanent search runs. See our interim CFO page.
A fractional or part-time CFO works a set number of days a week or month. It suits a growing company that needs board-level finance, investor reporting or fundraising support, but not every day. Our pages on how to hire a fractional CFO and hire a part-time CFO explain how it works. An advisory CFO advises without running the function.
A fractional or interim CFO working through their own company may fall within the off-payroll working rules (IR35). Status turns on how the engagement runs in practice, and a medium or large client makes the determination. Our IR35 guide sets out the tests.
What a CFO costs
A permanent CFO costs a salary plus employer costs, benefits and often a bonus or equity. An interim CFO is usually paid a day rate for every working day of the assignment. A fractional CFO is paid a day rate, or a monthly amount, for the days worked, so the cost follows the time the company needs.
Our fractional CFO cost page compares the options, and our fractional CFO hourly rate page converts day rates to hourly, each figure with its source. We set out pay or day rate for every candidate on the shortlist.
What a CFO earns
CFO pay depends on the size of the company, its sector, its ownership (listed, private equity-backed, venture-backed or family-owned) and whether the role carries a board seat.
We do not publish a pay band here. Our CFO salary page sets out full-time CFO pay and fractional day rates, each figure with its source. For finance directors, see fractional finance director salary.
How to hire a CFO
Start with the finance problem the company has now: reporting it cannot rely on, a fundraise or sale ahead, a lender or investor asking for more, or a finance team that has outgrown its leader. That decides the form of the hire and the experience that matters.
Choose between permanent, interim, part-time and fractional. Test every candidate against the same problem, check professional qualifications with the awarding body, take references from auditors or investors where you can, and check directorships before an appointment to the board.
We recruit fractional, interim, part-time, temporary and permanent executives, and non-executive directors. For a CFO brief we send a shortlist of 3–5, each with pay or day rate, availability and IR35 position set out, after our five-stage vetting. To hire a CFO for part of the week, see how to hire a fractional CFO; for a permanent appointment, see our CFO headhunter and finance director recruitment pages.
Questions people ask
What is the difference between a CFO and a finance director?
Often none in a smaller company: the ICAEW treats CFO and finance director as the same senior role. In larger groups the CFO leads finance across the group and sits on the main board, while finance directors run finance for a division, subsidiary or country. See finance director recruitment.
What is the difference between a CFO and a financial controller?
The financial controller runs the accounting and reporting process: the month-end, the statements, the controls and the audit. The CFO sets the financial strategy, raises funds and reports to the board. The ICAEW notes that a financial controller usually reports to the CFO or finance director.
Does a CFO need to be a qualified accountant?
Not by law. Many are, and investors, lenders and audit committees often look for a professional accounting qualification. A qualified accountant who is a director is held to a higher standard of care, because Companies House guidance says directors must use any relevant knowledge, skill or experience they have.
When does a company need a CFO?
Usually when the finance work moves beyond bookkeeping and the annual accounts: when the company is raising money, taking on debt, preparing for a sale, reporting to outside investors, or needs forecasts the board can rely on. A fractional CFO is often the first step.
Can a CFO work part-time?
Yes. A fractional or part-time CFO works a set number of days a week or month. See how to hire a part-time CFO.
How much does it cost to hire a CFO?
It depends on whether the role is permanent, interim or fractional, and on the size and stage of the company. Our fractional CFO cost and CFO salary pages set out sourced figures. We set out pay or day rate for every candidate on the shortlist.
How do I hire a CFO?
Define the finance problem, choose between permanent, interim, part-time and fractional, test every candidate against the same problem, and check qualifications, references and directorships. Our fractional CFO page sets out the process; we send a shortlist of 3–5, each with pay or day rate, availability and IR35 position set out.
