Chief Financial Officers (also known as a CFO) hold one of the highest levels of management within a company. A CFO oversees company’s budget as well as short and long term financial goals. They are responsible for all financial reporting within the company they are employed by. In order to become a CFO, you typically need years of prior experience as well as advanced education. This job comes with many responsibilities which can sometimes cause stress. Continue reading this article to learn more about the CFO job description and other important info about this career.
CFO Job Description
CFOs typically oversee all aspects of a company’s finances. They oversee the long and short term financial goals of the company and ensure that they are on track to achieving them. CFOs report all aspects of the company’s finances. Specific job responsibilities tend to vary based on factors such as the overall size of the company or how many departments or employees they oversee. They ensure that the company’s finances are in order. CFOs typically oversee and coordinate the financial and accounting departments.
The following are some of the most common job responsibilities of chief financial officers:
- Overseeing the creation of and adherence to a budget for the entire company
- Helps to establish and follow short and long term financial goals and other forms of strategic financial planning
- Monitoring all aspects of the company’s financial reporting
- Create, implement, and/or use financial tools to assist in monitoring the company’s finances
- Work with and oversee the company’s accounting and finance departments
- Recommending and monitoring investments made by the company
- Approving and reviewing financial reports for the company
- Oversees the legal aspects of the company’s finances
- Recommending ideas for the company’s strategic plan
Chief financial officers commonly work 40 hours each week. It is not that uncommon if they work over 40 hours in order to get their work done or to meet time-sensitive deadlines. In these instances, they may need to work into some evenings. However, they do not typically have to work on the weekends or on holidays. If an individual is the CFO of a large company, they may have to travel among various sites that belong to their company. Certain times of the year may be especially stressful and hectic for CFOs. This is typically the case during year-end reporting and other times throughout the year when financial reports are due.
Certain personality traits and characteristics are helpful or even necessary for chief financial officers to possess. Anyone who aspires to become a CFO should have excellent critical thinking skills that they can use to make informed decisions. They should also be able to use their critical thinking skills to solve challenging and complex problems for the company. They should be good communicators as they typically work closely with many people in various departments. Communication skills are a must. Leadership skills will also come in handy as the CFO is the mean leader of a company’s financial department. Other employees will look to the CFO for guidance pertaining to the company’s finances. Excellent accounting skills/mathematics skills are a necessity for CFOs. This is a key component of any CFO’s job, and the job cannot be done and done well if the CFO lacks strong mathematics skills. CFOs should be very motivated and driven. Not everyone can become a CFO, even if they possess relevant work experiences that qualify them for this job. In order to stand out next to every other viable candidate for a CFO position, an individual should be extremely motivated and driven. The ability to make important, high-stakes decisions under pressure is also essential for any CFO.
CFO Education Requirements
In order to become a CFO, you need at least a bachelor’s degree in accounting, business, or a related field. This is part of the basic CFO education requirements. Beyond the bachelor’s degree, you typically need a great deal of relevant work experience. You cannot become a CFO right out of college; you need to gain experience in order to be considered for such a position. It typically takes at least a few years of working lower level accounting or financial jobs until an individual will be considered for a CFO position. Commonly, companies are looking for individuals who have 5 or more years of solid, relevant experience. At present, many employers prefer to hire an individual who has a master’s in business administration (otherwise known as an MBA). Some companies may even require that prospective CFOs have an MBA or a master’s degree in a relevant field of study.
Individuals who have worked in the financial department of one company are typically promoted to the CFO position. However, some companies may not hire from within the company for a variety of reasons. It may be easiest to ‘get your foot in the door’ with a company and work your way up. Gaining several years of experience working as a financial manager may give you the background experience your employer is looking for in a new CFO. Also, earning an MBA can only help your chances of receiving a CFO position. Being a Certified Public Account or CPA can also be beneficial or in some instances necessary to become a CFO.
The CFO salary is extremely good. Salaries may vary based on a variety of factors such the region or location in which a CFO is employed, the size of the company they work for, the number of years of experience they have, and so forth. As of December 2010, CFOs had a median total income of $129,776 per year. Also, CFOs with a bachelor’s degree tend to earn lower annual salaries than CFOs who had master’s degrees. In some instances, CFOs who possess a master’s degree received over 10% more than those who only had a bachelor’s degree. The overall pay scale for CFOs varies from $85,581 to $174,241 or more, depending largely on the various factors mentioned above.
CFO Job Outlook
According to the BLS, the CFO job outlook in the coming years is quite good. The level of growth for these occupations may vary depending upon the specific industry CFOs are employed in. For example, the medical industry will continue to expand which should lead to continued chief financial officer positions being available to qualified candidates. Some industries may be stagnate and may not see much growth. In those industries, there may be fewer opportunities for individuals to pursue CFO positions. This will largely be dependent upon how well the economy is doing and what industries are thriving. If the economy is doing poorly, the insurance industry and other industries revolving around finances may not do as well. Those industries may be less likely to seek out new CFOs
Competition is quite high chief financial officer positions. However, individuals who have the highest levels of education, the most relevant work experience, and the most certifications are most likely to receive these coveted positions. Generally, the more education and qualifications an individual has, the greater the likelihood they will stand out amongst other candidates.
Continuing Education for CFOs
Most CFOs must be Certified Public Accountants (CPAs) in order to work as CFOs. They must maintain their CPA credentials through state mandated continuing educational requirements. If a CFO does not currently possess a master’s degree, it may be beneficial to earn one. Attainment of this degree may lead to a higher salary and greater knowledge about the financial field.