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vice president of finance

What is a Vice President of Finance? A Detailed Overview

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In this article, we’ll provide an overview of what a VP of Finance is, does, their salary, and more.

The world of finance can be very confusing for those living outside the realm of the corporate world. To a person unconcerned with details regarding the big financial picture of an organization, simply receiving the correct amount on a paycheck is all that interests them.

While conducting payroll is certainly a big responsibility of the Vice President of Finance (referred to as VP of Finance), many other responsibilities exist such as maintaining updated bookkeeping software, projecting revenue, and so much more. Overall, a VP of finance is integral to conducting and maintaining a smooth business operation.

The Vice President of Finance is a nuanced position with many roles to fill and responsibilities to adhere to. Below is a list of the responsibilities of a VP of Finance, a general job description, the skills needed to complete the job and what exactly a VP of Finance is.

What is a VP of Finance?

Primarily, a Vice President of Finance manages the financial needs of a company and communicates these needs with upper management. Financial opportunities include risk, investment and budget. The Vice President of Finance reports directly to the Chief Executive Officer (CEO) and the board on the state of an operation’s financial trajectory and whether different strategies need to be implemented in order to meet the financial goals of an operation.

Additionally, the VP of finance supervises accounting operations such as gross profit, expenditures, payroll and taxes. Within smaller corporations, The VP of finance may handle accounting directly. In larger corporations, however, usually duties related to accounting are handled by administrators and the VP of Finance works merely as a supervisor.

The role of Vice President of Finance is a top-tier position but can be usurped by the Chief Financial Officer, commonly referred to as ‘CFO,’ in larger organizations. In the case where there is a CFO and a Vice President of Finance, the VP of Finance is mostly a supervisory role over accounting and other financial administration. In these instances, the VP may have some influence over planning, but the CFO has a strategic role and more directly communicates with the board and CEO. Below we detail the general description of a VP of Finance. In certain instances, however, the duties listed may be relegated to the CFO for larger companies

Vice President of Finance Job Description

The Vice President of Finance projects revenue and expenses in order to strategize how best to optimize the financial growth of an organization while mitigating loss and redundancies. In order to strategize effectively, a VP of Finance collects data from accounting and administrative staff and analyzes cash flow. Once the data is collected, projections are made. Then, the VP of Finance will pitch his strategy most often to the CEO, CFO or other senior leaders. Sometimes, however, the VP of Finance reports to the Board of Directors. All of these responsibilities require an individual with the ability to analyze, plan and communicate. Other responsibilities include:

  • Creating up-to-date reports of all financial data
  • Preparing a cash flow projection and strategies for meeting this goal
  • Calculating the minimum amount of revenue required to keep normal operations
  • Ensuring taxes are paid correctly and the company is following other financial government regulations
  • Stay current on all changes to the state and federal tax codes
  • Comply with all financial laws and regulations
  • Investment strategy to diversify assets and services provided by an organization
  • Analyze trends in the market
  • Respond quickly and strategically to shifting market trends
  • Collaborate with the CFO, CEO or President to strategize ways for the organization to fulfill revenue goals 

In summation, the Vice President of Finance is the arbiter of financial health within an organization and the first line of defense during economic struggles. In order to adequately gauge financial health, the VP of Finance must routinely review the cashflow between various departments to address potential issues before they affect the entire company. Additionally, a Vice President of Finance creates a plan to best utilize revenue in order to create longevity within an organization. 

Vice President of Finance Job Skills

Managing all of these different responsibilities requires a person with a specific set of job skills. A good Vice President of Finance displays a rare aptitude that juggles effective communication, recognizing key financial data, and formulating different strategies to put an organization ahead of its competition.  Not everyone can handle the cash flow of a large and even fewer people can scope out market trends, identify investment opportunities and strategize how best to spend revenue to benefit an organization long-term. The VP of Finance requires an extremely specialized skill set.

In Depth Knowledge of Accounting

A Vice President of Finance must be an expert at accounting, taxes and auditing best practice. Tax laws are always changing. A VP of Finance is much like an accountant in many ways. Unlike an accountant, a Vice President of Finance focuses less on dollars and cents. Instead he takes a big picture look at revenue and cash flow to assess net profits and allocate resources required for seasonal changes in revenue streams. 

Fiscal management

A Vice President of finance must have fiscal management skills that extend beyond the role of an accountant. Beyond conducting payroll, they approve large expenditures and makes sure the overhead is calculated into the budget of an operation. The Vice President of Finance calculates both risk and revenue while keeping in mind seasonal changes (like increased Christmas sales or a summer slump).

Also, a VP of Finance strategizes the best way to use net profits to benefit and grow the company. Scoping out different investment opportunities as well as diversifying assets exist within the realm of a Vice President of Finance’s purview. The role is responsible for the fiscal health of an organization.

Report to Senior Management

Reporting to senior management such as the CEO or CFO is paramount in order to establish revenue projections and meet quarterly or yearly goals. Effective communication is necessary to approve many strategies developed by the Vice President of Finance especially in regards to large investment opportunities. A VP of Finance must be a great communicator and be able to work as a team.

Knowledge Tax Laws

Getting involved in a dispute with the IRS is costly and can stagnate the progress of an organization.  Therefore, staying up-to-date on all tax codes is paramount to ensuring that an organization is paying the correct amount each year. An incompetent VP of Finance can cost organizations large amounts of money by overestimating the amounts required by government taxes. Even worse is underpaying and defaulting on taxes which could have large monetary, if not criminal, consequences for an organization. 

Vice President of Finance Career Path

One does not stumble out of bed and decide that they would like to become a VP of Finance on a whim. Becoming a VP of Finance is not an entry level position because they’re responsible for the financial well-being of the company and each member of the entire organization. Shouldering the responsibility of running and maintaining an organization’s financial health requires years of vetted experience. Outlined below is the typical career path.

How Does One Become a VP of Finance? 

Becoming a VP of Finance at minimum requires a bachelor’s degree in accounting, business administration, finance or other related fields. Furthermore, one must typically have a CPA. Simply having a degree and certification is insufficient, however. Obtaining a job as a Finance VP requires finance experience within an industry, such as accounting, combined with effective management skills. Most businesses will only seek out candidates for the VP of Finance who have at least 10 years of experience in finance and management. Additionally, anyone seeking to become a VP of Finance must have general knowledge of Internet and Technology (IT) departments since most finance is calculated using software.

There are a few jobs that can lead to becoming a VP of Finance including being a financial analyst, bookkeeper, or accountant. However, to finally achieve a promotion to the role of VP, one must also demonstrate a successful track record in managing employees and communication; being an accountant for 10 years does not guarantee a career as a VP of Finance.

Careers Available After Serving as a VP of Finance

Although a Vice President of Finance is a senior position in an organization, there are many opportunities beyond VP of Finance. After demonstrating competence, one can grow into higher corporate positions. As always, a proven track record within your current position to make sure not only eligibility for higher roles but also opportunity to maintain the current role.  

Once serving as a Vice President of Finance, one may be able to become a Director, CFO, or even the Chief Executive Officer. Additionally, one may be able to make lateral moves to another company if the C-Suite positions are already filled for the foreseeable future. Making a lateral move is a good strategy if there is a better salary offered or room for upward mobility.

A Day in the Life of a Vice President of Finance

There are many activities of a VP of Finance that are only handled yearly or quarterly such as yearly financial objectives and planning or preparing monthly, quarterly and yearly financial statements. There are also, however, many duties that require expertise and attention on a day to day basis. A portion of the activities required of a VP of Finance on a daily basis include:


Like a general manager of a football team, a VP of Finance is constantly strategizing the best way to utilize capital, so that a company may optimize performance. This includes but is not limited to:

  • Evaluating financial performance and forecasting growth and revenue
  • Identify different tools like software that allow for operations to run more efficiently
  • Communicate regularly with the CEO or the Board
  • Acquire investors and consultants that align with the company’s growth objectives
  • Hire and manage accounts and payroll staff
  • Offer their expert opinion upon the financial impacts of pivotal decisions
  • Coordinate with staff to ensure all policies and procedures are closely followed

Develop a Financial Analysis

One of the key roles that a Vice President of Finance fills is providing a clear picture of the financial health of a company. This includes both evaluating day-to-day expenditures as well as projecting growth. A VP of Finance that is able to develop a proper financial analysis will be better prepared to keep an organization successful regardless of economic climate. Key aspects of a successful financial analysis include:

  • Preparing monthly, quarterly and yearly budget reports
  • Calculating both monthly profit and loss
  • Tracking cash flow
  • Prepare a monthly operating budget
  • Communicate with senior leaders regularly about the findings of financial analysis reports

Manage Accounting and Other Administrative Staff

Although a VP of Finance is a senior position within an operation, a good Vice President of fFnance operates as a liaison between ground operations and other senior management positions. Regularly communicating with accounting and administrative staff gives the VP of Finance a way to better assess and project a company’s growth. Someone in this role also has to ensure that accounting and administrative staff is given the tools they need to be successful. Responsibilities of a VP of Finance has toward their accounting department are:

  • Supervising the department
  • Ensuring all software is functioning properly and well-maintained
  • Acquiring up-to-date software that will help accountants become more efficient and accurate
  • Working with procurement managers on new purchases
  • Complying with all tax regulations, federal and state.
  • Mitigating accounting errors and handling staff who do not perform adequately
  • Work with the Human Resources department to ensure the business practices are legal and safe for employees
  • Responsible for reviewing end of month expenditure accounts
  • Handle both internal and external audits ensuring that they do not coincide with scheduled requirements such as the end of year review
  • Communicate with senior leaders about the health of the staff and report redundancies or need to expand certain departments
  • Getting SaaS spend management under control
  • Teaching people how to negotiate software renewals

Coordinate Cash Flow

A VP of Finance oversees the cash flow within an organization. Moreover, the VP of Finance is responsible for paying overhead costs, identifying investment opportunities and managing assets. Additional financial management responsibilities include:

  • Explore new investment opportunities
  • Calculating benefits and risks of investment opportunities
  • Manage assets
  • Developing relationships with bankers, vendors and business partners
  • Oversee weekly cash management
  • Approve large expenditures, send wires, and sign checks
  • Supervise revenue streams and ensure that all invoices are paid in a timely manner
  • Stay up-to-date on regular audit practices and current on changes in laws and tax codes
  • Check for upcoming SaaS renewals

As one can see, this role requires a high level of responsibility for the entire company because a company is nowhere without capital. The future of an organization and the livelihood of its employees rests upon a competent VP. Therefore, the job can be a stressful one. However, a VP can enjoy many perks.

Vice President of Finance Salary

As previously stated, the Vice President of Finance is responsible for a laundry list of duties crucial to the financial health of a company. Proper financial management is the beating heart of any organization and a good VP can impact the success of a company immensely. To attract the upper echelon of talent and ensure that a VP of Finance is compensated for the stress and burden they carry day-to-day. In this role, one can expect immense salaries with yearly and quarterly performance based bonuses.

The Vice President of Finance can expect to make a six-figure salary somewhere between $110,000 and $150,000 depending upon their years of experience. However, the VP of Finance may also be offered incentives to meet or exceed growth projections in the form of yearly or quarterly bonuses. Sometimes, these bonuses are a fixed amount once revenue meets a certain threshold. On other occasions, bonus pay is determined by a small percent of the net profit.

Bonus incentive structures help to motivate employees to perform to their best ability even though they are guaranteed a salary. A VP of Finance can use this bonus however they see fit. Some opt to give a portion to the administrative staff they oversee so that each member of the organization remains motivated to complete their job beyond the best of their ability.

Should You Be a VP of Finance?

Becoming a Vice President of Finance requires a focused career with years spent fostering the skills necessary to being an effective communicator with the ability to look at finance from all angles. If you are interested in finance or already an accountant, becoming a senior financial leader can be a lucrative and exciting career path to embark on if you love to lead others and are able to identify good financial strategies.

If this role is your ultimate goal, begin by becoming an expert on tax codes and regulations and work to the best of your ability in an accounting firm or other financial management institutions. Whenever possible, seek out management roles to fill. A VP of Finance is not a 9 to 5 job; it is a lifestyle. Only the hardest workers with years of experience who constantly try to better their skills are eligible to be a VP of Finance.

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