Learn About Being a CFO (Chief Financial Officer)

By Indeed Editorial Team

December 10, 2019

What does a CFO do?

A chief financial officer is responsible for overseeing and directing the annual and long-term financial goals of an organization. The CFO performs broad business and accounting tasks and is responsible for accuracy, timeliness and regulatory compliance of financial reporting. They supervise financial personnel, analyze financial statements and develop strategies for an organization’s finances. Specific responsibilities for this role include:

  • Executing the financial strategy of a company and ensuring full transparency over its financial performance

  • Developing strategies for internal growth to increase company revenue as well as reduce costs

  • Developing and pursuing business ventures and watching over mergers and acquisitions 

  • Supporting the CEO with the preparation of monthly and annual financial plans

  • Supervising the preparation of financial statements and reports and coordinating tax documentation

Average salary

Salaries for this position vary according to your experience level and geographic location:

  • Common salary in the U.S.: $126,696 per year

  • Some salaries range from $30,000 to $291,000 per year.

CFO requirements

There are several qualifications required to obtain a position as a CFO. They include:

Education

Because this is an executive position, candidates are typically expected to hold, at a minimum, a bachelor’s degree in accounting, finance or another closely related field. The coursework in these programs would help students develop analytical skills as well as teach them financial analysis methods and software.

Many companies prefer, or may even require, candidates who hold a Master of Business Administration (MBA). This program is typically completed in two years and can be pursued while the MBA candidate is working full- or part-time. Some MBA programs even require candidates to have work experience before being admitted to the program.

Training

The training for this role is generally acquired through a combination of formal education and on-the-job training in lower roles. Top executives like CFOs are often promoted from within an organization after acquiring a considerable amount of experience in a financial manager position. Before advancing into a management position, aspiring CFOs may have worked as an accountant or financial analyst. In some cases, companies will provide formal management training programs to prepare financial workers for management roles.

Certifications & licenses

While certification or licensure is not typically required for the role of CFO, many do obtain them to demonstrate a high level of motivation as well as competence. Here are a few options you could consider for this role:

Chartered Financial Analyst (CFA) Certification

Offered by the CFA Institute, this certification covers concepts and skills that bridge theory, industry practice and professional standards to lay a foundation for investment analysis and portfolio management.

Certified Treasury Professional (CTP)

Through this certification, candidates demonstrate that they are experts in treasury management and have a thorough understanding of cash processing, reconciliation, analyzing financial statements and more. 

Certified Public Accountant (CPA)

The requirements for obtaining a CPA license can vary somewhat from state to state. All candidates, though, are required to complete 150 semester hours of postsecondary study. This typically includes at least some graduate-level coursework. When candidates have met the minimum requirements, they must sit for four different exams, for which they have 18 months to pass. They then maintain their CPA license through continued education. 

Skills

There are a number of skills that can help CFOs succeed in their executive roles. They include:

Communication skills

These refer to both verbal and written communication skills. A CFO must be able to communicate clearly and persuasively, discussing financial strategies with executives, directing employees in the financial department and explaining policies or decisions to people both inside and outside of the company.

Leadership skills

These skills include delegation, the ability to motivate others and honesty and integrity. CFOs must be able to identify financial strategies to increase revenue or reduce costs and delegate the associated tasks to other members of their team. They must be able to create a vision and inspire the team to perform at the best of their abilities to reach a goal in a timely manner. They must also behave with honesty and integrity and be trustworthy, as they are responsible for the finances within an organization.

Problem-solving skills

A CFO is responsible for solving problems related to an organization’s finances. This requires analysis, research, creativity and decision-making skills.

Time-management skills

A CFO primarily works independently and therefore must have strong time-management skills to accomplish daily, weekly and monthly goals without being distracted by less-critical tasks.

Technical skills

These refer to hard skills that CFOs learn through formal education or certification programs. These skills include accounting, budgeting and forecasting.

CFO work environment

CFOs typically work in office environments with the following characteristics:

  • Extended hours sitting at a desk

  • Using computers, printers, faxes and other office equipment

  • May require working evenings and weekends

  • May require travel

CFOs work in every industry and both large and small organizations. Some of them are self-employed consultants who work as CFOs part-time for numerous companies. 

How to become a CFO

These are the typical steps you should take to pursue a career as a systems analyst:

1. Pursue an education

The CFO role requires at least a bachelor’s degree in finance or another closely related field and many employers prefer that candidates have an MBA or CPA as well. Search for open positions in your area for CFOs and determine the minimum educational requirements for the role. Obtain that education.

2. Obtain experience

To qualify for a CFO position, you must have substantial experience in a financial leadership role. If you are still in school, look for internship opportunities where you can obtain hands-on experience working in a finance or accounting department. If you have completed your bachelor’s look for entry- or associate-level financial roles, such as an accounting assistant or financial analyst. When you have enough experience, pursue a role as a financial manager.

3. Obtain certifications or licenses

When you have enough education and experience, pursue professional certification or even a CPA license. While they are not required, they will verify that you have the skills required to perform responsibilities within the role. 

4. Update your resume

When you have the necessary education, 10 or more years of experience and certifications, update your resume. Include your highest level of education, certifications and your relevant work history. Emphasize the quantifiable results you have achieved in the financial positions you have held in your career.

5. Apply for jobs

Search for open CFO positions in your area and identify the roles for which you are most qualified based on your work history and experience. Apply with your updated resume and a well-crafted cover letter.

CFO job description example

Rebels Fitness is seeking a Chief Financial Officer to assume a strategic cold in the management of the company. The CFO will be responsible for the day-to-day activities of planning, implementing and managing financial-related aspects of the company. This includes overseeing accounting, payroll, billing and collections and planning and analysis. Some of the specific responsibilities include overseeing all aspects of the finance and accounting department, advising executives on the financial implications of organizational activities and goals, conducting financial forecasting and developing budgets. 

Candidates are required to have a bachelor’s degree in finance and an MBA or CPA is preferred. 15+ years in a financial leadership role also required. The ideal candidate will have strong interpersonal, problem-solving and creative skills, as well as a high level of integrity.

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