The chief financial officer (CFO) is the highest level of financial authority in a company. They oversee and administer the overall company finances and reporting, and ensure that employees and other stakeholders have access to accurate information about their organization’s finances.
CFOs are chosen for their extensive business knowledge and their ability to think strategically about how to best plan for the future. They are skilled at identifying new revenue streams, cutting costs, streamlining operations, and negotiating deals. A good CFO always thinks about how their actions will affect the company as a whole, not just one department or one person.
Read on to learn more about what it’s like to be a CFO and what it takes to become one yourself.
Chief Financial Officer Job Duties
Chief Financial Officers are responsible for the following duties:
- Reviewing financial data and creating business plans, strategies, and sales forecasts to meet company goals
- Analyzing the organization’s financial condition and making recommendations regarding how to improve profitability, including cost control measures and planning for capital expenditures
- Creating a long-range strategic plan for the organization by meeting with senior management to establish goals and objectives, using computer models to determine expected outcomes, and developing a strategy to achieve those goals
- Creating budgets for different departments within the company such as human resources or marketing based on expected revenues and expenses over time
- Supervising employees in finance such as accountants or budget analysts who provide financial information about the organization’s performance over time, perform calculations related to financial statements such as analyzing cash flow statements or calculating debt ratios, or assist with tax filing preparations and other accounting tasks on an ongoing basis
- Providing training and development opportunities for employees in finance on topics such as new systems or software that may be implemented within the company’s accounting processes
- Developing plans on how to address any issues with current systems or software used by accounting staff
- Meeting regularly with top management of the organization to discuss ideas for improving profitability or decreasing costs of operations
Chief Financial Officer Salary & Outlook
The median annual wage for chief financial officers is $167,168. Those earning higher wages tend to work in the finance and insurance industries, and the top earners are making over $320,000 per year.
The number of CFOs is declining over the next decade. This is due to a trend toward smaller companies that have less need for a full-time CFO. Many smaller businesses are turning to accounting software and other technologies to handle their financial needs.
Chief Financial Officer Job Requirements
The requirements for chief financial officers are as follows:
Education: Chief financial officers must have a bachelor’s degree in accounting or business administration. Many CFOs hold a master’s degree in business administration (MBA) with concentrations in finance.
Experience: CFOs usually gain experience in the field before moving into management positions. The CFO usually has at least ten years of experience in a financial position. Many begin their careers as accountants or auditors. They may also work as controllers or budget analysts.
Certification: Although not required, many employers look for candidates who have earned certification from professional organizations such as the American Institute of Certified Public Accountants (AICPA).
Chief Financial Officer Skills
In addition to high-level experience and financial qualifications, CFOs require the following skills:
Accounting and finance skills: CFOs must have a strong understanding of accounting and financial principles as well as compliance in order to manage the financial aspects of a company.
Decision-making skills: CFOs must have proven decision-making skills as they make decisions that affect company profitability.
Analytical skills: Strong analytical skills are necessary for reviewing and evaluating the accuracy of financial reports.
Communication skills: CFOs must possess excellent interpersonal and communication skills to communicate at all levels. CFOs may need to negotiate with bankers, investors, lenders, and other business partners when necessary.
Strategic skills: CFOs must be able to develop long-term strategies for their company’s growth and profitability.
Stress management skills: CFOs must be able to work in stressful situations as they have a high level of responsibility.
Chief Financial Officer Work Environment
Chief financial officers work in a variety of companies, from small businesses to multinational corporations.
Chief financial officers typically spend a lot of their time in an office, but they also travel to meet with investors, business partners, and government officials.
The job is mentally demanding, requiring high levels of concentration to interpret financial data, analyze trends, and make decisions about data. It can also be stressful, as CFOs must deal with the realities of the business world, including the need to make tough decisions that may affect the company’s bottom line.
Chief Financial Officer Career Advancement
Senior executives of companies are often promoted from the CFO position. It’s not uncommon for CFOs to move on to COO or CEO positions within their companies. This is because they have proven themselves capable leaders who understand how money flows through a company and what it takes to make it grow. Additionally, they’ll have the knowledge and connections necessary to open your own company or pursue other leadership opportunities in your industry.
Chief Financial Officer Trends
Here are three trends influencing how chief financial officers work. Chief financial officers will need to stay up-to-date on these developments to keep their skills relevant and maintain a competitive advantage in the workplace.
Rise of the Financial Forecaster
As financial forecasting becomes more important for chief financial officers, they will be looking to hire financial forecasters with strong skills in mathematical analysis and data interpretation.
Furthermore, as companies move towards more innovative forms of business models, including big data-based projects that are inherently risky, it is essential that CFOs have the right people on board who can effectively mitigate risks associated with these changes.
Need for More Experienced CFOs
A shortage of experienced CFOs has led to a rise in contract or temporary CFOs. The global market for senior finance talent is projected to reach $9.5 billion by 2020, reflecting the growing demand for qualified CFOs.
As companies look to replace retiring CFOs, they will increasingly turn to external recruiters and financial staffing firms in order to fill this gap with experienced candidates.
Growing Importance of New Technologies
The chief financial officer (CFO) plays a vital role in any organization, but as technology continues to grow in importance, the CFO’s responsibilities are shifting.
While they still play an important role in determining financial goals and analyzing reports to determine the company’s bottom line, many CFOs are now required to spend more time focusing on how new technologies can help them reach those goals.
How to Become a Chief Financial Officer
1. Planning Your Career Path
Those interested in a career as a chief financial officer must develop financial skills, business acumen, and leadership skills. Becoming a CFO typically requires years of experience, so aspiring candidates should focus on building their resumes by working in positions and organizations that offer valuable experience that will build these skills.
2. Writing a Resume
A resume for a Chief Financial Officer should be tailored to the specific job. The first step is to review the job description carefully and highlight any skills, experience, or qualifications listed in the description. Then create a work experience section based on those items.
CFOs are often involved in decision-making at the highest level of a company, so it’s important to make sure your resume demonstrates your ability to make informed decisions, communicate with others effectively, and use critical thinking skills. You should also highlight any experience working with teams or collaborating with employees on projects.
3. Applying for Jobs
The CFO is a high-level job, and one that takes a lot of time and energy to fill. The most important thing to do when looking for a job as a CFO is to get your name out there. Start by making sure you have a good profile on LinkedIn and an impressive resume. Leverage your personal network by reaching out to old clients or anyone you know who works in the industry. Attend networking events and connect with people on social networks like Facebook and Twitter.
4. Ace the Interview
In order to ace an interview as a chief financial officer candidate, you’ll want to come prepared with knowledge of the company and its current financial standing. Try to get to know the business and how it has grown over time. It is also important to know what type of management style the company uses and how that will affect your position. You should be prepared to answer questions about how you would use the available resources to make sure the company’s goals are met. A chief financial officer should know about different aspects of the business including sales, profit margins, the cost of goods sold, the capital budget, etc. This is your chance to show that you are knowledgeable about finance!
Make sure you dress professionally and bring along a few copies of your resume in case you need to leave one behind. During the interview, it is important to remain positive and maintain eye contact. You should also ask for clarification if you do not understand a question. Make sure you avoid asking personal questions during the interview and try to steer clear of using slang terms or phrases during the conversation.