An institution hiring a chief financial officer (CFO) should receive high-level financial management. An unqualified CFO puts him/her self in a precarious position if all he or she is doing is record-keeping and reporting when your employer is looking for much more than that. An institution of higher education requires solid, strategic leadership; this requires much more than a bookkeeper can or should provide.
A CFO is responsible for:
Milestone Advisors says, “...a CFO takes on a broader role in planning for the current and future financial needs of the business.”
CFO Edge says, “While the primary function is to look ahead, the CFO must also be able to understand past financial performance in order to accurately predict the organization’s financial future.”
A bookkeeper is responsible for:
CFO Edge says, “The primary function of the [bookkeeper] is to maintain and operate the books and records of the business, looking back at data already generated.”
The Overture Group says, “A [bookkeeper] is typically the day-to-day manager of the tactical accounting issues.”
In the absence of a true CFO, key responsibilities are delegated to inexperienced lower level employees resulting in missed opportunities and reactive decision making. Alternatively, senior administrators (typically the president) assume the duties of CFO in their “spare time.”
We must ask, then, if the president is performing the role of CFO, who is performing the role of president? It is not realistic or advisable for a president, or anyone else, to tack on CFO responsibilities to their schedule. Each of us are limited to the same 24 hours in a day; something will have to give.
A president’s role is vital—if a president is taking even a part of their day to perform CFO responsibilities, those hours, which should’ve been spent on presidential matters, are wasted. An institution cannot reach its full potential without a true CFO. A quality administrative team requires experts in all areas of higher education management, including financial management.
A bookkeeper’s role is to look back. A CFO’s role is to look forward. All institutions require the services of a true CFO. Without it, the institution is guaranteed failure.
Often times neither the president or the board understand the importance and the value of a CFO. This is most often seen in smaller, less sophisticated institutions with weaker boards. A sophisticated board will understand—and demand—strategic financial leadership.
An excellent bookkeeper is valuable to an institution. Knowing you have quality information is critical. Expecting a bookkeeper to serve as the CFO is irresponsible and short-sighted.
Maybe because your institution doesn’t have any financial leadership? This is a self-fulfilling prophecy. Poor leadership results in a lack of quality financial planning and management, which leads to a lack of financial progress, which means an institution can’t afford a lot of what it truly needs. A quality CFO can get an institution off this track.
If you are an institution looking for a new business officer, gain a deep understanding of the needs of the institution, the roles and responsibilities demanded of your leadership, and hire effectively.
If you are an institution who hired who you thought would be a CFO but you’ve discovered you really have a bookkeeper, you have a responsibility to your employee. They accepted the position on good faith. If you didn’t really understand what you actually needed, that’s not their fault. You will need to work closely with them to either 1) bring them up to speed, by providing clear expectations and the training to achieve those expectations, 2) transition your current employee to someplace else in the institution, or 3) work with the employee to find other employment without jeopardizing their career, their budget, or their family.
If you are an employee that wants to be (or already should be) a true CFO:
Association of Business Administrators
of Christian Colleges
4578 Hidden Ridge Drive
Hudsonville, MI 49426
(877) 303-8666
Fulfill your calling, solve challenges, and maximize resources to accomplish the mission of Christian higher education.