How to become a cfo: A Comprehensive Guide

Many of us dream of ascending the corporate ladder to become a Chief Financial Officer (CFO), but aren’t sure where to start. With the CFO position being one of leadership, power, and strategy, it’s no surprise that this career goal is highly sought after by individuals with financial acumen.

This comprehensive guide will help you navigate through the necessary educational paths, certifications, and career-building strategies needed to reach your objective.

Key Takeaways

• To become a CFO, you need ambition and education, such as a bachelor’s degree in accounting or finance.
• Gaining relevant experience, like working at one of the “Big Four” firms or securing a controller position, can be beneficial for aspiring CFOs.
• Consider pursuing an MBA or MSF degree to enhance your knowledge and skills in finance and business.
• Obtaining professional certifications like CPA or CMA is important for becoming a successful CFO.
• Develop management skills and gain cross-functional knowledge to contribute to the strategic direction of the company.
• Stay updated on technology developments and join career networks for opportunities in the field of finance leadership.

 

Understanding the Role of a CFO

The role of a CFO encompasses various responsibilities and duties, requiring specific skills and qualifications that set them apart from CEOs and other C-suite executives.

CFO Responsibilities and Duties

The job of a Chief Financial Officer, or CFO, has many parts.

 

• They must lead their team with power and strategy.
• One big job they do is plan how the company will use its money.
• They also have to make sure all the money business of the company is done right.
• A CFO helps make big choices about what the company should do next.
• They must know a lot about what can change the worth of the company’s money.
• If new laws come out about money, they need to understand them.
• The CFO has to speak up and tell other leaders in the company when there could be problems.
• At times, they may need to act like second-in-command to the CEO.
• A good CFO must know much about technology and how it can help their work.
• They also need to keep an eye on what other companies are doing with their money.

 

Skills and Qualifications of a CFO

A CFO has many skills and qualifications to meet job demands. Here is a list of them:

 

1. A bachelor’s degree in accounting or finance is key. This is often seen as the best first step to the role of CFO.
2. Many CFOs also earn an MBA or MSF degree for more learning and chances to meet new people.
3. CFOs often get a professional certification. Two very useful ones are CPA and CMA.
4. A CFO must have solid work experience in areas apart from just accounting.
5. Great leaders make great CFOs, so good management skills are important.
6. It’s smart to build a strong career track or even take a faster route if possible.
7. Some opt to add on a business credential like CMA certification.
8. Both leadership and strategy skills play into the job of a CFO.
9. Finally, having clear career goals will keep any aspiring CFO on the right path.

 

The Differences between a CFO and a CEO

While both CFOs and CEOs play key roles in guiding an organization, they have distinct responsibilities and areas of focus. The CEO, or Chief Executive Officer, is the highest-ranking executive in a company, setting the direction and overall strategy for the business. On the other hand, the CFO, or Chief Financial Officer, is responsible for managing the company’s finances, including financial planning, managing financial risks, record-keeping, and financial reporting.

 

CEO	CFO
Leads the overall direction and strategy of the company.	Manages the company’s finances and financial risks.
Works closely with the board of directors and other executives to plan the future of the company.	Works closely with the CEO and other executives to manage the company’s financial strategy and operations.
May have a background in any area of the business.	Usually has a background in finance, accounting or a related field.
Has a broad focus, overseeing all parts of the business.	Has a specific focus, overseeing the company’s financial health and financial operations.

 

These differences highlight the complementary roles of the CFO and CEO. While the CEO sets the direction and strategy of the company, the CFO ensures that the company’s finances are managed effectively to support these goals.

The CFO Career Path

The CFO career path involves working at one of the “Big Four,” taking on a treasury role, or securing a controller position.

Working at One of the “Big Four”

Working at a “Big Four” firm is a key move on your way to becoming a CFO. These firms offer great chances to learn and grow. Many people who work here handle big accounts and tough tasks, so they gain deep skills in accounting and finance.

This step often helps you get ready for more high-level jobs later, such as the position of CFO. So, spending some years at one of these firms can give you solid training for the future.

Taking on a Treasury Role

One important step in the CFO career path is to take on a treasury role. This involves managing an organization’s finances, including cash flow, investments, and risk management. As a treasury professional, you will be responsible for ensuring that the company has enough funds to meet its financial obligations and make strategic investments.

You will also work closely with other departments to develop budgets and financial plans. Gaining experience in this role will provide you with valuable insights into financial management and prepare you for the responsibilities of a CFO.

It’s worth noting that gaining the right education and making relevant connections are crucial steps in becoming a successful CFO.

Securing a Controller Position

To secure a controller position is an important step towards becoming a CFO. This role allows individuals to gain valuable experience in financial management and control. Many aspiring CFOs start their careers as controllers because it provides them with the opportunity to develop skills in areas such as financial reporting, budgeting, and analysis.

Additionally, working as a controller helps individuals understand the complexities of an organization’s operations and build relationships with key stakeholders including vendors, customers, employees, and shareholders.

It is recommended that aspiring CFOs pursue relevant education such as a bachelor’s degree in accounting or finance and obtain certifications like CPA or CMA to increase their chances of securing a controller position.

Steps to Become a CFO

To become a CFO, you’ll need to earn a relevant bachelor’s degree, gain experience, and develop management skills. Read on to learn the strategic steps you can take to reach your career goals.

Earning a Bachelor’s Degree in a Relevant Field

To become a CFO, it is important to start by earning a relevant bachelor’s degree in fields like accounting, finance, or business. This degree provides the foundational knowledge needed for a career in finance and sets the stage for further education and experience.

While not always mandatory, having a bachelor’s degree attracts employers and helps establish credibility as an aspiring CFO. Pursuing additional certifications such as Certified Public Accountant (CPA) or Certified Management Accountant (CMA) can also enhance your qualifications and make you stand out among other candidates.

Overall, obtaining a bachelor’s degree in a relevant field is an important step towards becoming a successful CFO.

Obtaining an MBA or MSF Degree (Optional)

Getting an MBA or MSF degree is not mandatory, but it can be helpful for individuals aiming to become CFOs. These advanced degrees provide additional study time and networking opportunities that can enhance your knowledge and skills in finance and business.

An MBA (Master’s of Business Administration) program covers a wide range of subjects such as finance, accounting, marketing, operations, and leadership. On the other hand, an MSF (Master’s of Science in Finance) degree focuses specifically on financial subjects like investments, risk management, and corporate finance.

Both degrees can give you a deeper understanding of financial strategy and prepare you for the complex responsibilities of a CFO position.

Gaining a Professional Certification, Like a CPA or CMA

To become a CFO, it is important to gain a professional certification, such as a CPA or CMA. Many CFOs hold these certifications because they are seen as essential in the field of finance.

CMAs are particularly valued for their expertise in financial management and strategic decision-making. In fact, CMAs earn a median total compensation that is 58% higher than non-CMAs globally.

Having these certifications not only enhances your knowledge and skills but also makes you a preferred candidate for CFO positions. So, if you’re aspiring to be a CFO, pursuing a professional certification like CPA or CMA should be an important step in your career path.

Accumulating Well-Rounded Experience

To become a CFO, it’s important to have well-rounded experience beyond just accounting. Aspiring CFOs should gain knowledge in areas like IT, human resources, investor relations, supply chain, and operations.

This broader understanding of the business will help them make informed financial decisions and contribute to the overall strategic direction of the company. Developing management skills is also crucial for aspiring CFOs, including team management and effective communication.

By gaining expertise in financial management and strategic decision-making, candidates can increase their desirability for CFO roles.

Developing Management Skills

Developing management skills is an important step for anyone aspiring to become a CFO. While strong financial and accounting knowledge is crucial, it’s equally important to have the ability to lead and manage a team effectively.

As a CFO, you will be responsible for overseeing multiple departments within the organization and making strategic decisions that impact the company’s financial future. Effective communication, problem-solving, and decision-making skills are essential in this role.

Additionally, honing your leadership abilities and being able to collaborate with cross-functional teams will contribute to your success as a CFO. By continuously developing these management skills throughout your career, you can position yourself as a strong candidate for future advancement opportunities in finance leadership roles.

Enhancing Your CFO Candidacy

Mastering necessary technical skills, improving leadership and communication skills, and staying updated on technology and cybersecurity developments are just a few ways to enhance your candidacy for the CFO position.

Don’t miss out on these crucial steps in your journey towards becoming a successful CFO.

Mastering Necessary Technical Skills

Mastering necessary technical skills is crucial for becoming a successful CFO. As a CFO, you need to have strong financial acumen and expertise in areas like budgeting, analysis, and compliance.

Obtaining professional certifications such as the CMA or CPA can help showcase your technical skills and enhance your candidacy for the role. Many CFOs hold these certifications, emphasizing their importance in the field.

In addition to certifications, gaining well-rounded experience across different aspects of finance is essential. This includes exposure to strategic financial decisions and developing management skills alongside technical expertise.

Improving Leadership and Communication Skills

Improving leadership and communication skills is crucial for enhancing your candidacy to become a CFO. As a CFO, you will be responsible for leading teams and making strategic decisions that shape the financial future of the company.

Strong leadership skills are essential for effectively collaborating with other executives and guiding your team towards achieving financial goals. Additionally, effective communication skills are vital in presenting complex financial information in a clear and concise manner, both internally to colleagues and externally to stakeholders.

By continuously working on improving these skills, you can position yourself as a strong candidate for CFO roles and increase your chances of success in this demanding role.

Enhancing Cross-Functional Knowledge of the Company

To enhance your candidacy for the role of CFO, it is important to have cross-functional knowledge of the company. This means understanding how different departments and functions within the organization work together to achieve common goals.

By expanding your knowledge beyond finance and accounting, you can better contribute to strategic decision-making and become a valuable asset in driving the company’s success. This includes gaining insights into areas such as operations, marketing, sales, human resources, and IT.

Having a holistic understanding of how these functions interact will enable you to identify opportunities for collaboration and make informed financial recommendations that align with overall business objectives.

Staying Updated on Technology and Cybersecurity Developments

Staying updated on technology and cybersecurity developments is crucial for aspiring CFOs. The accounting industry is experiencing significant growth in AI adoption, with a projected increase of 30%.

As a CFO candidate, having knowledge about technology and cybersecurity can make you a valuable asset. Keeping up with technological advancements is important to stay competitive in the job market.

Technology plays an essential role in improving accuracy in data analysis and transaction management within the accounting field. By staying informed about the latest trends and developments, you can demonstrate your ability to adapt to changing circumstances and contribute effectively as a CFO.

Joining a Career Network

Joining a career network can greatly enhance your chances of becoming a CFO. By joining a career network, you can connect with other professionals in the finance industry who have similar goals and aspirations.

This allows you to build valuable relationships and learn from others who have already achieved success in their careers. Through networking events, conferences, and online forums, you can gain insight into current trends and best practices in the field of financial management.

Additionally, being part of a career network provides access to job opportunities that may not be publicly advertised. Employers often turn to trusted networks when searching for qualified candidates for executive-level positions like CFOs.

Pursuing Board-Readiness Training

Pursuing board-readiness training is highly recommended for individuals who aspire to become CFOs. This type of training can greatly enhance their candidacy for CFO positions. It provides them with the necessary knowledge and skills to effectively serve on a company’s board of directors, including understanding corporate governance principles, financial oversight responsibilities, risk management, and strategic decision-making.

By undergoing board-readiness training, aspiring CFOs demonstrate their commitment to professional development and readiness to take on executive-level roles. Additionally, this training can help individuals build valuable connections within the business community and gain insights from experienced professionals in senior leadership positions.

Overall, pursuing board-readiness training is an important step towards achieving the goal of becoming a successful CFO.

Frequently Asked Questions

How Long Does It Take to Become a CFO?

Becoming a CFO takes time and dedication. There is no set timeline, but it typically takes several years to reach this high-level position. It starts with earning a bachelor’s degree in accounting or finance, which usually takes around four years.

After that, gaining relevant work experience and developing management skills can take another five to ten years. Pursuing additional education, such as an MBA or obtaining certifications like CPA or CMA, can also add to the timeline.

Ultimately, the journey to becoming a CFO depends on individual circumstances and career goals.

What Degree Do You Need to Become a CFO?

To become a CFO, it is typically recommended to have a bachelor’s degree in accounting or finance. These degrees provide the necessary foundation in financial principles and analysis that are essential for the role of a CFO.

However, it is important to note that having an advanced degree such as an MBA or MSF can also be beneficial for aspiring CFOs. These degrees offer additional study time and networking opportunities, which can help individuals develop the skills and connections needed to succeed in higher-level positions.

Additionally, obtaining a professional accounting certification like CPA or CMA is highly recommended for those who want to become CFOs. These certifications demonstrate expertise in accounting principles and can enhance job prospects in this field.

Is It Hard to Be a CFO?

Becoming a CFO is a challenging but rewarding journey. As the second-in-command to the CEO, the CFO plays a crucial role in strategic decision-making and financial management. This position requires advanced education, such as a bachelor’s degree in accounting or finance, and professional certifications like CPA or CMA are highly recommended.

Additionally, developing leadership skills and staying updated on technology and cybersecurity developments are important. With ambition, determination, and continuous learning, aspiring CFOs can navigate their way through this career path successfully.

Conclusion.

To become a CFO, you need ambition and education. Gain relevant experience, like working in the “Big Four” or as a controller. Get a bachelor’s degree in accounting or finance, and consider pursuing an MBA or MSF degree.

Earn professional certifications like CPA or CMA, and develop management skills. Enhance your technical skills and cross-functional knowledge of the company. Build leadership abilities, stay updated on technology developments, and join career networks for opportunities.

With determination and hard work, you can achieve your goal of becoming a CFO!