This blog was originally posted on our sister site the Finance Alliance.
They're two of the most important C-suite positions in any company. The Chief Financial Officer (CFO) and Chief Revenue Officer (CRO) work to keep the business financially stable and profitable. Though their titles sound similar, the CFO and CRO have very distinct responsibilities.
The CFO oversees accounting, cash flow, and financial planning, while the CRO is laser-focused on driving sales and boosting revenue. But that’s just scratching the surface. Dig a little deeper and you’ll uncover the key differences between these two chief roles - differences that highlight why the Chief Revenue Officer vs Chief Financial Officer dynamic is so crucial for companies (and their success).
So, what exactly are these key differences?
Read on as we discuss how both roles differ, their main responsibilities, and how they can work together to drive growth and profitability.
What is a Chief Financial Officer (CFO)?
A CFO, or Chief Financial Officer, is the financial leader of a company and a key member of the C-Suite. They manage the company's finances, create budgets, oversee financial reporting, and make strategic decisions to ensure the organization's fiscal well-being. Essentially, they're in charge of the financial direction and health of the company.
What is the responsibility of a CFO in a company?
A CFO is responsible for:
- Overseeing all accounting and financial reporting
- Managing cash flow and tracking expenses
- Preparing budgets and financial forecasts
- Assessing and mitigating financial risks
- Securing financing and managing capital
- Overseeing audit processes and tax compliance
- Creating financial models and analyses
- Providing strategic guidance on finances
Who is higher than the Chief Financial Officer?
The only role that outranks the Chief Financial Officer is the Chief Executive Officer. The CFO is as high up the corporate ladder as you can get, aside from being the top boss. So, the CFO holds major power and influence in any organization.
What position is right below a CFO?
Right below the CFO you’ll usually find the VP of Finance, Head of Finance, or Corporate Controller. They usually oversee the day-to-day management of the finance team and records. The Controller handles more of the nuts and bolts while the visionary CFO keeps their eyes on the strategic financial big picture.
Is the CFO responsible for revenue?
While the CFO oversees the finances, they aren't directly responsible for bringing in revenue. That crucial job belongs to the Chief Revenue Officer. The CFO manages the money while the CRO's job is to maximize sales and income. So the CFO ensures profits are optimized while the CRO makes sure revenue is growing steadily.
What is a Chief Revenue Officer (CRO)?
As we mentioned, the Chief Revenue Officer (CRO) is a key executive who oversees and leads strategies related to generating revenue for a company. They typically manage sales, marketing, and customer-related functions to drive growth and maximize revenue streams. The CRO's role is to align these departments, identify new business opportunities, and create a cohesive approach to boost the company's overall revenue and profitability.
The CRO is all about driving revenue and sales. Their primary focus is boosting top-line growth. Some core Chief Revenue Officer responsibilities include:
- Developing the company's go-to-market and sales strategies
- Setting targets for revenue growth
- Leading and managing the sales organization
- Overseeing customer acquisition efforts
- Identifying new revenue opportunities
- Aligning sales initiatives across departments
- Crafting incentive programs to motivate the sales team
- Providing visibility into sales pipelines and forecasts
Who reports to a Chief Revenue Officer?
The Chief Revenue Officer has a whole team of revenue roles reporting to them.
Typically, the sales department, including all the sales VPs, directors, and managers, reports directly to the CRO. This allows the CRO to drive strategy and sales execution across the entire sales org.
The CRO also often has marketing under their purview since marketing plays a key role in supporting sales pipelines and lead generation. Having both sales and marketing roll up provides alignment between those customer-facing teams.
In some cases, Customer Success may also report to the CRO. The CRO is responsible for the full revenue lifecycle, from bringing in new business to retaining and growing existing accounts.
Having all these critical revenue-focused teams under one leader allows the CRO to power a unified revenue-generation machine.
Common ground (CFO vs CRO)
While their roles may sound distinct, the CFO and CRO do share some essential territory.
Both roles also require a deep understanding of the business landscape, an ability to forecast trends, and a knack for strategy implementation.
Their mutual goal?
Ensuring the company thrives in both the short and long run.
While the CRO and CFO have their unique territories, they're two sides of the same coin. Both are indispensable in steering the company towards financial success and stability.
Is CFO higher than CRO?
In the traditional corporate hierarchy, the Chief Executive Officer (CEO) is at the top, followed by other C-suite executives. Both the Chief Financial Officer (CFO) and Chief Revenue Officer (CRO) are part of this executive team, but their positions can vary in terms of reporting structure depending on the organization.
However, in some companies, the CFO is considered higher in the hierarchy than the CRO. But generally speaking, the CFO and CRO are peers - neither role outranks the other. They both sit at the highest level of the organization as C-suite executives.
The ideal relationship between the CFO and CRO is a partnership of equals. They collaborate closely together to drive profitable growth.
Key differences between a Chief Revenue Officer vs CFO
While the CFO and CRO have complementary aims, there are key differences between the roles:
Background and evolution of the roles
The CFO role has a long history, being formally established in the early 1900s. It rose to prominence as regulations increased after the Great Depression. The CRO role emerged more recently, gaining traction in the 1990s as global competition heated up. Companies needed to focus more intensely on sales growth.
As outlined earlier, CFOs focus on the company’s profits, while CROs drive revenue. A CFO’s core aim is to maximize income, minimize costs, and ensure financial discipline across the organization.
CFOs keep a close eye on cash flow, balance sheet strength, liquidity, and return on investment. They provide financial guidance, modeling, and analysis to inform strategic decisions across the business.
On the other hand, CROs drive revenue by concentrating directly on sales growth and customer acquisition. Their priority is boosting the top line, whether through pricing, product development, marketing, sales operations, or market expansion.
CROs bring deep sales strategy expertise and lead the charge in profitably scaling revenue. They focus on managing the sales organization, improving sales productivity, and identifying new monetization opportunities.
CFO vs CRO skills
CFOs excel at numerical analysis, modeling, forecasting and risk assessment. CROs thrive at salesmanship, relationship building, persuasion and market strategy. They both bring very different, but important, capabilities to the table:
- Financial modeling and analysis
- Data interpretation
- Accounting expertise
- Budgeting and forecasting
- Risk assessment
- Process optimization
- Strategic financial planning
- Audit oversight
- Tax strategy
- Capital allocation
- Compliance management
- Sales management
- Marketing and messaging
- Persuasion and influence
- Customer insights
- Pricing strategy
- Sales operations
- Sales training and coaching
- Compensation design
- Pipeline management
- Channel optimization
Find out more about key CRO skills here.
CFOs focus on metrics related to money and overall profitability like cash flow, working capital, gross profit margin, current ratios and so on.
CROs drill down on metrics that impact revenue. These include sales growth, customer acquisition, churn rate and pipeline trends.
What is the relationship between CRO vs CFO?
The relationship between the CFO and CRO is collaborative and interdependent. While their primary responsibilities may differ, their efforts often intersect, especially in areas where financial decisions and risk management align.
Friction points between CFOs and CROs
Both roles aim for profitable growth, but there can be natural friction between the cautious, risk-averse CFO and opportunistic CRO.
CFOs must ensure financial discipline and often play "bad cop" by posing challenging questions about the sales team's assumptions and projections. CROs can get frustrated by conservative financial hurdles imposed by the CFO.
Close collaboration and mutual respect are vital. The CFO and CRO should function as partners, not adversaries. When aligned, they balance prudent financial management with an appetite for top-line growth.
Some sources of tension between these roles include:
- CROs pushing for expensive sales initiatives that the CFO deems too risky
- CFOs rejecting lead generation campaigns based on low ROI projections
- Disagreements over sales forecasting and pipeline assumptions
- CROs incentivizing revenue growth in ways that sacrifice margins
Tips to resolve issues:
- Establish joint KPIs to unite their focus
- Improve forecasting by collaboratively questioning assumptions
- Develop revenue goals that balance growth, profitability and risk
- Maintain open communication and transparency between teams
Can a CFO also be a CRO?
In small companies, it’s possible for the CFO to also handle CRO duties, at least temporarily. But in larger firms, the extensive responsibilities of both roles make this difficult to sustain.
The CFO risks getting spread too thin and being ineffective in one or both roles. Specialized CRO expertise in sales strategy and execution often becomes essential as companies scale.
Does a company need both a CFO and CRO?
Most large companies have both roles, while small firms might only initially need a CFO.
Here are signs it may be time to add a dedicated CRO:
- Revenue growth is stagnating
- Profit margins are shrinking
- The sales team lacks cohesion and strategy
- There are gaps in sales training and effectiveness
- Sales forecasting is unreliable
- Marketing and sales lack alignment
The CFO vs CRO dilemma comes down to money versus sales. The CFO manages cash flow while the CRO boosts the top line. Both contribute immense strategic value, making these two roles indispensably important in any growth-oriented company.