Only ambitious and dedicated employees have their eyes on the Chief Financial Officer (CFO) position. It’s comparable to a CEO, so getting it isn’t easy. Everything is possible, but it’s better to be prepared. Here is everything you need to know if you see yourself as a CFO.
Source: Unsplash
It Might Take You a While to Become One
If you’re just starting your career and would like to become a CFO one day, the number one thing you need to know is that it takes a lot of work and patience. Stellar education in finance, years of relevant experience, and outstanding leadership skills are the bare minimum. You’re looking at about a fifteen-year-long successful career before you can become a competitor for a CFO position.
By the way, a four-year college degree might be enough for a great career in accounting or finance, but it’s not if you dream of becoming a CFO. You’ll also need a professional certification (a Certified Public Accountant, a Certified Management Accountant, or something similar) and an MBA or MSF. All of those take quite a lot of time as well as money.
Besides, accounting or finance professionals aiming for a CFO role will need to make a name for themselves in the industry. You might have perfect experience, so hiring a professional resume editing service can help you become very impressive at job interviews. But that’s not always enough. When companies are looking for a CFO, they typically rely on their networks and headhunting. So if you’d like to become a CFO, you need to take networking seriously throughout your career.
A CFO Isn’t Just an Excellent Accountant
A proper finance and accounting pro is necessary for a would-be CFO, but that’s just the tip of the iceberg. What matters no less, if not more, is being a great leader. The days when only someone with a background in accounting could hope to become a CFO are long gone. Now, companies are willing to hire someone with little accounting and finance experience as long as their leadership skills are unparalleled.
One of the things that matter for a leader is communication skills, which is something that financial managers often lack. Not to generalize, but most of them are used to working with numbers more than people, which shows. To be a competitive candidate for a CFO position, you’ll need to invest in your soft skills, especially the ability to build and manage teams (which entails a lot).
Also, a CFO should be a skilled data analyst. According to Deloitte’s CFO Insights report, one of the critical competencies CFOs should possess is the ability to use analytics as a competitive resource. Ideally, all decision-making in the company is supposed to be data-driven—the responsibility for ensuring that it often falls on the shoulders of a CFO.
The Amount of Accountability Is Enormous
Unlike most other employees, a CFO isn’t just accountable to their company. They also have to ensure that their employer doesn’t have any issues with regulatory entities, such as, for example, the Securities and Exchange Commission. A skilled accountant shouldn’t have any problems with that, but it’s still important to remember if you want to become a CFO.
But even the accountability to a CFO’s employer is a lot. They are in charge of the financial health of the entire company. This means that if anything finance-related doesn’t run smoothly at any level of the organization, the company’s CFO is the first person who will have to respond. Not everything can handle that much responsibility, so think twice if that’s what you want. Taking the hit for other people’s mistakes isn’t fun.
For businesses that don’t have the resources for a full-time CFO but still need financial guidance, they can always hire a fractional CFO. A fractional CFO provides businesses the benefits of experienced financial leadership on a part-time basis, ensuring strategic guidance without the full-time cost. This is a great option for scaling small and medium sized businesses.
For the Most Part, the Pros Outweigh the Cons
That said, there is a lot to love about a CFO position. If you’re an outstanding accounting expert who is not just good at but also genuinely enjoys leading others, the benefits of being a CFO far outweigh the downsides. Here are a few reasons why all the hard work that goes into becoming a CFO is worth it:
- You’ll face new challenges all the time, so it’ll never be boring. The same things that make a CFO’s role difficult also make it exciting. Because of how much a CFO is responsible for, you won’t have to worry about your job being monotonous once you become one. And new challenges mean continuous professional growth.
- The money is excellent. An average CFO in the U.S. can expect an annual income of $300,000 to $500,000. It depends on the company’s size, past accomplishments, and negotiation abilities during the job interview. So if financial security is a priority for you, aiming for a CFO position is a great idea.
- A good CFO has everyone’s respect and recognition. Like any other C-level job, a CFO is a title you’ll proudly announce to everyone who asks you about your career. Sure, prestige doesn’t matter to everyone. But if it does to you, it’s no wonder you’d like to become a CFO.
- A CFO is a second-in-command, so they have a lot of power to influence decision-making. That’s not really accurate according to formal hierarchies, but CFOs tend to be CEOs’ right-hand people. And they also have a say in almost everything that happens in the company, so it’s a perfect career for everyone who’d like to feel like they matter.
An Afterthought
Overall, the road toward becoming a CFO might not be for the faint-hearted, but it’s worth it. Over a decade of diverse corporate experience is a must (on top of two degrees and professional certification). But once you polish your finance expertise, data analysis competencies, and leadership skills, you’ll enjoy the respect, money, and exciting challenges that come with a CFO job title.
