What Is a Chief Financial Officer?

By Indeed Editorial Team

Updated September 17, 2021 | Published February 25, 2020

Updated September 17, 2021

Published February 25, 2020

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Chief financial officers (CFOs) are the highest financial executives in an organization and often work closely with other C-level professionals to optimize financial operations and manage capital structures. Becoming a CFO involves developing a unique set of skills, acquiring extensive experience and achieving a certain level of education. In this article, we explain what a chief financial officer is and dissect the duties and skills that make them vital to a company’s success.

What is a chief financial officer?

A chief financial officer is an executive responsible for the financial activities of a business. This is the highest-level financial management professional in the company, responsible for compliance with legal and regulatory requirements. They're also responsible for forecasting and developing long-term plans for a company's profitability. A CFO prepares financial reports and may directly or indirectly supervise staff members who perform financial tasks.

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What does a CFO do?

The CFO's role varies by company. In some organizations, the chief financial officer's role is highly structured and limited to producing and analyzing reports. However, as these functions have become more automated, in many organizations, the CFO position has evolved to perform other roles.

  • Creating strategies: A CFO partners with the chief executive officer to develop long-term plans. Investments and capital planning are part of this vision. When the company wants to undertake a costly new venture, the CFO is responsible for making sure the resources are there to implement the plan. This task involves cash flow management, budget development and assessment of financial strengths and weaknesses.

  • Leading: This professional leads a team of other financial and administrative personnel, such as accountants, analysts and clerks. A CFO also often has a leadership role at a higher level. Along with other members of the senior management team, the CFO helps lead the organization in the right direction to achieve visions and objectives.

  • Decision-making: CFOs are decision-makers responsible for analyzing financial reports to assist the management team in making the most informed decisions possible. They should be able to review all the data and statistics available in order to make final financial decisions for the company. 

  • Representing: A CFO is an ambassador who facilitates financial discussions with other parties inside and outside the company. They are an authority on the financial state of the company, so credibility is critical to the organization's success. A CFO may be involved in negotiations for large contracts with customers and vendors.

  • Monitoring compliance: A CFO is responsible for keeping the company in compliance with laws and regulatory requirements. For example, a CFO makes sure that accounting procedures accurately capture income and expenses using accepted accounting principles. It is their job to make sure the company follows all tax laws as well.

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Average salary

CFOs are most often full-time employees. Their salaries usually depend on the size, type and location of the organization in which they work. Education and experience can also affect CFOs wages.

  • Average salary in the U.S.: $126,959 per year

  • Some salaries range from $29,000 to $294,000 per year

CFOs also make an additional $20,000 per year in profit-sharing on average.

Skills for CFOs

Good CFOs need more than just a thorough knowledge of accounting principles. They also need to know how to apply these principles to lead the company financially. Here are a few skills that CFOs should have in order to be successful:

  • Interpersonal skills

  • Time management

  • Analytical thinking

  • Problem-solving

  • Leadership

Interpersonal skills

Financial planning for an organization requires input from other managers as to future needs, so a chief financial officer should be able to work well with others. As CFOs also often lead accounting or financial departments, they should be able to work well with employees to ensure departmental success. They should be trustworthy and maintain a reputation for integrity and honesty.

Time management

A CFO often works long hours to meet the many obligations involved with the position. Working 50 to 60 hours per week can be common, especially when they need to meet deadlines. As a result, time management and the ability to balance responsibilities are critical skills for a CFO.

Analytical thinking

Because they have a significant role in decision-making and future planning, CFOs must be critical thinkers who can apply logic and financial intelligence to business challenges.


CFOs make many large-scale financial decisions that could affect the entire organization. They should be able to create solutions to challenges that are easy to implement company-wide and don't cause further issues. Having strong problem-solving skills can help them develop thorough decisions that may require creativity and innovation.


A large part of a CFO's duties includes leading others. Possessing good leadership skills enables a CFO to successfully promote company strategies and convince employees to follow them. Leadership skills can also help a CFO increase motivation and employee engagement within the departments they manage.

Frequently asked questions about being a CFO

If you're planning for a career as a CFO, you may have some specific questions about how to execute that career trajectory. Here are a few of the most common queries.

What is the difference between a CFO and a controller?

CFO is a term used most often in large organizations. The title of controller is usually used in smaller organizations. While both titles may be used to refer to the highest level financial management professional in the company, CFOs often have additional responsibilities as part of the senior management team.

Who does a CFO report to?

Most CFOs report directly to the CEO, executive director, president or another high-level executive. A few CFOs in smaller organizations report to a committee of a board of directors.

How long does it take to become a CFO?

Because every person and every company are different, there is no set timeline for reaching a CFO position. How long it takes is a matter of experience and preparation to get ready to lead a company financially. After completing your education, it could take eight to 10 years of financial or business management experience to be prepared for this role.

What education does a CFO need?

In terms of formal education, most companies require the chief financial officer to hold an MBA or comparable degree. An undergraduate degree in finance or accounting is an excellent program to start with before you move on to a master's degree program. In some industries, the CFO of a company needs to be a Certified Public Accountant.

Do you need certification to be a CFO?

You don't need a certification or license to become a CFO, though many earn financial credentials throughout their career, including:

  • Certified Public Accountant

  • Chartered Financial Analyst

  • Certified Internal Auditor

  • Certified Management Accountant

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