What Is the Difference Between a CFO and a VP of Finance?

In many organizations, especially growing or mid-sized companies, the titles Chief Financial Officer (CFO) and Vice President of Finance (VP of Finance) are sometimes used interchangeably. This can create confusion for employees, job candidates, investors, and even company leaders. While both roles are senior financial positions and share overlapping responsibilities, they are not the same. The differences lie in scope, authority, strategic influence, and relationship to the executive leadership team and board.

Understanding these distinctions is important for organizational design, career planning, and corporate governance. This article explains what each role does, how they differ, and when a company might need one versus the other.

Overview of the Two Roles

At a high level:

• The CFO is a C-suite executive responsible for the overall financial strategy and financial health of the organization.

• The VP of Finance is a senior finance leader who typically oversees day-to-day financial operations and reports to the CFO (or, in some cases, directly to the CEO).

Both roles are critical, but their focus and authority differ significantly.

The Role of the CFO

Strategic Leadership

The CFO is one of the highest-ranking executives in a company. As a member of the executive leadership team, the CFO plays a central role in shaping the company’s long-term strategy.

Key strategic responsibilities include:

• Setting the company’s overall financial strategy

• Advising the CEO on major business decisions

• Evaluating mergers, acquisitions, and investments

• Managing capital structure and funding strategy

• Balancing growth, risk, and profitability

The CFO looks beyond numbers to understand how financial decisions impact the company’s competitive position and future direction.

Relationship With the Board and Investors

One of the most important distinctions is that the CFO often serves as the primary financial liaison to:

• The board of directors

• Investors and shareholders

• Lenders and financial institutions

• Analysts and regulators (in public companies)

The CFO presents financial results, explains risks, and builds trust with external stakeholders. This external-facing responsibility is a defining feature of the role.

Enterprise-Wide Accountability

The CFO is accountable for the company’s entire financial ecosystem, which often includes:

• Finance and accounting

• Treasury and cash management

• Tax strategy

• Risk management and insurance

• Compliance and internal controls

• Financial systems and data governance

In many organizations, the CFO also oversees areas such as IT, legal, procurement, or strategy, depending on company structure.

The Role of the VP of Finance

Operational Financial Management

The VP of Finance is primarily focused on execution and operations. This role ensures that the company’s financial processes run efficiently, accurately, and on time.

Typical responsibilities include:

• Managing accounting and finance teams

• Overseeing budgeting, forecasting, and financial planning

• Ensuring accurate financial reporting

• Monitoring cash flow and working capital

• Implementing financial policies and controls

While strategic thinking is still important, the VP of Finance is usually more hands-on with the numbers than the CFO.

Internal Focus

Unlike the CFO, the VP of Finance is typically internally focused. Their main stakeholders are:

• Department heads

• Operational leaders

• Finance and accounting staff

They translate high-level strategy into financial plans, budgets, and performance metrics that teams can actually execute.

Supporting the CFO or CEO

In organizations with a CFO, the VP of Finance usually reports directly to them and acts as a trusted second-in-command. In smaller companies without a CFO, the VP of Finance may report directly to the CEO and effectively perform many CFO-like duties—though often without the same level of authority or external exposure.

Key Differences at a Glance

Decision-Making Authority

A critical difference lies in decision-making power.

• The CFO has authority to approve major financial decisions, such as capital investments, financing arrangements, and high-risk initiatives.

• The VP of Finance usually makes recommendations, prepares analyses, and executes approved decisions, but does not have final say on enterprise-level matters.

This distinction is especially important during periods of rapid growth, restructuring, or financial stress.

Strategic vs. Tactical Focus

The CFO spends much of their time asking questions like:

• How do we fund growth without increasing risk?

• Which markets or products generate the best returns?

• How do we maximize shareholder value over the long term?

The VP of Finance focuses more on:

• Are we tracking against budget?

• Are financial reports accurate and timely?

• Are internal controls working effectively?

Both perspectives are necessary, but they operate at different altitudes.

Company Size and Structure Matter

The difference between CFO and VP of Finance can vary depending on company size:

Small Companies and Startups

• May only have a VP of Finance or Head of Finance

• The role may function as a “de facto CFO”

• External investor relations may be limited

Mid-Sized Companies

• Often have both roles

• VP of Finance handles operations

• CFO focuses on strategy, fundraising, and leadership

Large Enterprises

• CFO oversees multiple finance leaders

• VP of Finance may manage a specific region, division, or function

• Roles are clearly separated and specialized

Career Path Differences

Many finance professionals see the VP of Finance role as a stepping stone to CFO, but the transition is not automatic.

To move from VP of Finance to CFO, professionals usually need to develop:

• Broader business and strategic thinking

• Executive communication skills

• Experience with investors and boards

• Comfort with risk management and ambiguity

Being excellent at financial operations alone is not enough to succeed as a CFO.

Compensation and Influence

Because of the broader scope and higher accountability:

• CFOs typically receive higher compensation

• CFOs often have equity incentives

• CFOs hold greater organizational influence

VPs of Finance are still highly compensated but generally have less visibility and power compared to C-suite executives.

When Does a Company Need Both?

A company typically needs both a CFO and a VP of Finance when:

• Financial complexity increases

• Transaction volume grows significantly

• The CFO’s time is better spent on strategy rather than operations

• Stakeholder expectations (investors, regulators) become more demanding

In this structure, the VP of Finance ensures financial excellence, while the CFO focuses on leadership and direction.

Conclusion

While the CFO and VP of Finance both play vital roles in managing an organization’s finances, they are fundamentally different positions. The CFO is a strategic executive with enterprise-wide responsibility and external accountability. The VP of Finance is an operational leader who ensures the financial engine runs smoothly.

Understanding the difference helps companies design better leadership structures and helps finance professionals plan their careers more effectively. Both roles are essential—but they serve distinct purposes, and confusing them can lead to misaligned expectations and missed opportunities.