Chief Financial Officer (CFO)

What is a Chief Financial Officer (CFO)?

A Chief Financial Officer (CFO) is the senior executive who manages a company's financial strategy, operations, and reporting. The CFO oversees financial planning, capital allocation, and ensures the organization's financial infrastructure supports sustainable growth. They report directly to the CEO and typically manage finance teams including the controller, treasurer, and financial planning and analysis functions.

In SaaS and subscription businesses, CFOs have taken on expanded responsibility for revenue operations infrastructure. When a company adopts usage-based pricing or hybrid billing models, the CFO ensures the billing system can accurately capture consumption data and support compliant revenue recognition.

Core CFO Responsibilities

Financial Strategy and Planning

The CFO develops the company's financial strategy, balancing growth investments against profitability targets. This includes capital allocation decisions, scenario planning, and setting financial objectives that guide organizational priorities.

For recurring revenue businesses, CFOs establish frameworks for evaluating pricing strategies, customer acquisition economics, and lifetime value metrics. They determine when to prioritize growth over profitability and build financial operations to support subscription or consumption-based revenue models.

Revenue Operations and Compliance

Modern CFOs oversee the systems that capture, recognize, and report revenue. This responsibility has grown more complex as companies move beyond simple subscription pricing toward usage-based or hybrid models.

Revenue operations includes:

• Revenue recognition compliance (ASC 606, IFRS 15)

• Billing system selection and implementation

• Quote-to-cash process design

• Deferred revenue management

• Usage data integration with financial systems

The CFO ensures billing platforms can handle pricing tiers, usage metrics, contract modifications, and prorations. Billing systems that cannot properly capture these elements create revenue recognition problems that ultimately fall to the CFO to resolve.

Capital Management and Investor Relations

CFOs manage the company's capital structure and fundraising activities. They prepare financial models for investor presentations, lead due diligence processes, and negotiate funding terms. After fundraising, they handle investor reporting and board communications.

Cash management becomes critical for companies with seasonal revenue patterns or those investing heavily in growth. CFOs monitor runway, optimize working capital, and evaluate debt versus equity financing options.

Financial Technology Stack

The CFO selects and implements the financial technology infrastructure:

• ERP systems for general ledger and accounting

• Financial planning and analysis platforms

• Billing and subscription management systems

• Payment processing infrastructure

• Business intelligence and reporting tools

System integration matters. When billing data exists separately from the ERP, finance teams spend time on manual reconciliations instead of strategic analysis. CFOs evaluate whether systems can scale with the business and support increasingly complex pricing models. For companies using sophisticated billing approaches, platforms like Meteroid provide the infrastructure to manage usage-based pricing while integrating with financial systems.

CFO Organizational Structure

Finance organizations typically include several key functions:

Controller - Manages accounting operations, financial statement preparation, and internal controls. Ensures accurate month-end close and compliance with accounting standards.

Treasurer - Oversees cash management, banking relationships, and capital structure. Manages foreign exchange risk and liquidity.

Head of FP&A - Leads financial planning, forecasting, and analysis. Develops budget models and provides financial insights to business units.

Revenue Accounting Manager - Handles revenue recognition, particularly important for companies with complex billing arrangements or subscription models.

The CFO focuses on forward-looking strategy while the controller handles backward-looking accounting. Controllers ensure financial statements accurately reflect what happened. CFOs determine what should happen next and how to allocate resources to achieve strategic goals.

Smaller companies often have a controller without a CFO, hiring a fractional CFO for strategic guidance. Companies typically bring on a full-time CFO as they scale beyond $10-15M in revenue or prepare for institutional funding.

Billing and Pricing Considerations

Revenue Recognition Complexity

CFOs at companies with usage-based or hybrid pricing face particular challenges around revenue recognition. Unlike simple subscriptions where revenue is recognized ratably over the contract term, usage-based revenue requires:

• Real-time usage data integration

• Accurate rating and pricing application

• Estimation for unbilled usage at period-end

• Contract modification accounting

• Multi-element arrangement allocation

The billing system must provide the data granularity needed for compliant revenue recognition. Manual workarounds create audit risk and don't scale.

Pricing Strategy Analysis

While product and revenue leaders often drive pricing strategy, CFOs provide the financial analysis that informs these decisions. They model revenue impacts of different pricing structures, analyze margin implications, and forecast P&L effects of pricing changes.

CFOs evaluate:

• Revenue impact of shifting from tiered to usage-based pricing

• Margin implications of per-unit pricing changes

• How contract terms affect cash flow and revenue recognition

• Whether pricing strategies optimize for growth or profitability

Metrics and Performance Tracking

CFOs establish the metrics framework for recurring revenue businesses:

• Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR)

• Net Revenue Retention (NRR)

• Customer Acquisition Cost (CAC) and Lifetime Value (LTV)

• Rule of 40 (growth rate plus profit margin)

• Gross margin and contribution margin by segment

For usage-based businesses, CFOs also track average revenue per account, consumption rates, and expansion revenue from increased usage.

Technology Requirements for CFOs

Billing System Integration

CFOs need billing platforms that integrate with the general ledger. The billing system should push revenue, deferred revenue, and accounts receivable entries automatically, with detailed backup for audit purposes.

Requirements include:

• Support for complex pricing models (tiered, volume, usage-based)

• Accurate proration calculations

• Contract modification handling

• Multi-currency support

• Revenue recognition scheduling

• Dunning and collections automation

Financial Planning Tools

Modern CFOs use cloud-based FP&A platforms that connect to source systems and enable scenario modeling. These tools pull data from CRM, billing, and ERP systems to create unified financial forecasts.

The ability to model different pricing scenarios, customer cohorts, and growth assumptions allows CFOs to provide strategic guidance rather than just historical reporting.

When Companies Need a CFO

Companies typically hire a full-time CFO when:

• Annual revenue exceeds $10-15M

• Preparing for Series B or later funding rounds

• Managing complex financial operations or international expansion

• Building financial infrastructure for scale

• Within 12-18 months of potential exit or IPO

Fractional or part-time CFOs work well for:

• Companies with $2-10M in revenue

• Startups preparing for institutional fundraising

• Organizations implementing new financial systems

• Businesses needing temporary coverage or specific project expertise

The CFO role has evolved from accounting oversight to strategic business partnership. Modern CFOs must understand billing infrastructure, revenue recognition complexity, and how pricing strategies impact financial performance. For companies with usage-based pricing or complex billing models, the CFO's role in selecting proper billing systems directly affects revenue recognition compliance, financial forecasting accuracy, and investor confidence.