How To Become A Chief Financial Officer
Career Video: Chief Financial Officer
Do you have excellent financial analysis and budgeting skills? Are you capable of preparing and meeting financial goals? Do you have a deep understanding of tax codes, cutting costs, and building equity/revenue? Could you see yourself as a chief-level executive of an organization, overseeing and managing accounts for optimum performance? If you think you have the business and accounting skills required to become an elite financial manager, then you may want to consider a career as a chief financial officer.
Why Become A Chief Financial Officer
A chief financial officer (CFO) is an executive-level professional accountant. Their main responsibility is to ensure the financial health of an organization, optimizing profits, while limiting spending and waste. There are a number of duties they must fulfill to ensure their organization’s financial growth: They supervise and assist in the production of financial statements; analyze revenue and spending trends; create strategies for optimal growth; oversee and coordinate mergers and acquisitions; and consult other executives and management regarding financial decisions.
CFOs are more than just financial analysts and managers; these members of the C-suite are ultimately responsible for the financial benefits and consequences of an organization. Not only are they responsible for lower-level employees, but they are responsible to the public if they work for a publicly traded company. The role of a CFO is essential to the survival of any organization.
Certain qualities and skills are required of an individual who works as a CFO:
- Interpersonal networking skills
- Mathematical competence
- Business intelligence
- Technologically savvy
- Financial aptitude
- Strong leadership
- Cooperative and team-oriented
- Communication skills
- Ethical character
Chief Financial Officer Work Environment
CFOs work in conference rooms and offices. Sometimes their work demands travel, especially in regards to mergers and acquisitions. They work fulltime, typically during normal business hours. The importance of their work may require working evenings, weekends, and holidays. There may be some busier business seasons, in which more effort is necessary.
The majority of financial managers, in general, work for financial and insurance firms. Others work in manufacturing, scientific, technical, and professional capacities, with a small percentage working for government agencies. Those working as CFO, will most likely work for a larger corporation.
Chief Financial Officer Salary
The median annual salary for all chief executives is $173,320. Experience, industry, organizational size, and geographic location affect salary. For CFOs who work for organizations that earn annual revenue below $50 million, they can expect to make between $99,000 and $142,000. However, CFOs who work for companies with annual revenue of over $500 million per year can expect to make between $280,500 and $430,250.
Chief Financial Officer Career Outlook
The job growth rate for CFOs is 9 percent, which is below average for all occupations in the United States. The main reason for this slow growth is because the typical industries for CFOs are expected to decrease hiring of new employees; these industries include banking and savings institutions. Since competition will be strong for any CFO position in any industry, candidates are encouraged to obtain graduate-level education, certification, and extensive relevant work experience.
Chief Financial Officer Degree
CFOs must have at least a bachelor’s degree and work experience to obtain this executive-level position; however, most CFOs continue their education to receive a master’s degree or to become a certified public accountant (CPA).
Step 1: Obtain a bachelor’s degree. There is no specific bachelor’s degree required to become a CFO; many programs in business, business administration, finance, accounting, or economics will prepare an individual for this occupation. Financial analysts and managers who look to advance toward an executive position are recommended to take courses that will enhance their financial and analytical skills, business aptitude, and communication skills.
Step 2: Gain work experience. Organizations promote or hire employees with 5 to 15 years’ experience for their C-suite positions, depending on the size of the institution. Networking, management, and good judgment are key aspects to this role.
Continuing education and training are also necessary tools for advancement. Whether an individual aspires to be a CFO or if the individual is already a CFO, continuing education will offer up-to-date information regarding technology, best practices, market trends, and IRS issues.
Step 3: Obtain certification (optional). A way to advance in knowledge and credentials is to become a certified public accountant (CPA). In fact, many organizations require their CFOs to be CPAs. CPAs are experts in tax and financial planning, as well as providing a variety of services, including information technology (IT), consulting, accounting, and assurance.
Step 4: Obtain a master’s degree (optional). While a graduate degree is not a requirement for some employers, many will require their chief executives to have a master’s degree. Earning a Master of Business Administration (MBA) is an excellent course of action; however, other programs, such as accounting and finance will elevate candidates to be prepared for the role of a CFO.