A Vice President of Finance, or VP of Finance, is a member of the executive team responsible for managing the financial health and operations of the business. Generally, a VP of Finance will make between $90-200,000 per year, but this very wide range is contingent on a number of factors including the size of the company, the scope of their role, the size and function of the finance team throughout the company, experience level, education, and a collection of other variables that exist on a situational basis.
VP of Finance Salary
As an experienced and critical member of the executive team, a VP of Finance can expect to make between $90,000 and $200,000 per year. Payscale reports that the average is right around $150,000 per year. In addition, the compensation package will often include bonuses or profit sharing as a perk of executive position.
The way the VP of Finance fits into the greater organization will also affect the salary range. Often, VPs of Finance are being groomed for an eventual step to CFO once the company grows a need for one, so a career growth trajectory may also factor into the initial VP of Finance salary.
VP of Finance Salary by Experience
A VP of Finance may also be eligible for bonuses, which are usually proportionate to profits or performance, according to Salary. A VP of Finance might make between $10,000-$75,000 a year in bonuses!
As the economy grows, the need for financial managers is growing rapidly. Financial managers are growing at a rate of 16%, which the Bureau of Labor Statistics reports is much faster than average. This means salary will be competitive and opportunities will increase for nearly all finance professionals.
Factors Influencing VP of Finance Salary
- Number of reports/size of department
- Company size
- Salary of CFO, CEO, Controller, and other current finance managers
- Education & experience
- Job role (e.g. interacting with potential investors increases value)
- Potential for bonuses and revenue sharing
Try entering your specific details here to see a more targeted estimate of what a VP of Finance can expect to make. Of course, this is merely an estimate but can give you a better idea of appropriate compensation.
Vice President of Finance Job Description
The VP of Finance is responsible for reporting the financial operations of the company to the CEO and president as a critical member of the executive team. They take ownership of the financial team from the executive level down to the daily transactions of the business.
A typical VP of Finance Job Description could include:
- Manage accounting
- Reporting of finances to CEO, shareholders, investors, etc.
- Financial analysis
- Projection & modeling
- General leadership & vision
- Building relationships with stakeholders, banks, and others
The role of a VP of Finance will need a lot of flexibility to meet the needs of the company. A Vice President of Finance could function as a controller, a Chief Financial Officer, Managing Accountant, and more. A large company will likely see more specialization and a variety of targeted roles, while a smaller company may blend titles and responsibilities, according to Career Trend.
VP of Finance vs. CFO
If you’ve confused the titles of VP of Finance and Chief Financial Officer, you’re not alone. There may be some overlap in skills and responsibilities, but typically there are some key differences in the roles. If your company employs both a Chief Financial Officer and a VP of Finance, usually the CFO will work on projection and strategy while the VP of Finance will manage the execution of financial operations, such as accounting and audits.
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Essentially, CFOs are needed in companies with rapid growth, or for those looking for future facing management. A VP of Finance is more involved with day-to-day management and functioning of the company. (The Bowdoin Group breaks down VP of Finance vs. CFO helpfully here.)
Who Can Be A VP of Finance?
Typically a VP of Finance will have a strong background in accounting or business, with years of experience in the day-to-day financial operations of a company. Unlike a standard accountant, however, a VP of Finance will need some knowledge and skill in the management side of business. Long term perspective and planning are both key for a role in the executive team, as well as the ability to coordinate across departments to achieve a company vision.
Key Skills of a VP of Finance
There is no set path to becoming a VP of Finance, but there are a few general skill sets that are essential.
Degree in Accounting or Business is usually required, and CPA certification is greatly preferred. Extensive knowledge of tax requirements, budgets, accounts payable/receivable, and financial reporting is critical. The VP of Finance needs to oversee all finances and correct errors.
A master’s degree in business, business management, or a related field will best prepare an individual for a role as VP of Finance. Often a stepping stone position between entry accounting or business operations to VP Finances can indicate readiness—such as Senior Accountant, Controller, or other promotion involving managing others.
Beyond the finance and management portions of a VP role is the executive function. The executive team is responsible for developing a plan for the company moving forward. A VP of Finance will need analysis and projection skills that will allow them to make predictions, plans, and suggestions for future development.
Whether you’re a finance professional looking to map out your career path, or a CFO looking to create more structure in your organization, it’s important to consider the role and compensation for a VP of Finance. Creating sound job expectations and an enticing compensation plan can benefit all parties and move you along the road to success.
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