In an interview session, you were asked; what does a Chief Financial Officer (CFO) do? What will your response be?
The Chief Financial Officers (CFOs) formulate the organization’s financial plan and control its finances’ priorities; they are at the top of the organization chart and work closely with other C-level managers to set and achieve company goals.
Generally, a person gains a CFO title after at least 10 years of continuous proficiency in management accounting or financial positions.
CFOs often have advanced degrees such as MBAs. They may have professional licenses or certificates, making them certified public accountants (CPAs) or certified accountant managers (CMAs).
This article discusses more what CFOs do, their skills to succeed, and the steps you can take to get started in this highly paid, responsible job.
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Article Road Map
Chief Financial Officer Jobs & Responsibilities
CFOs perform the following functions:
- Direct the departments of finance and operations
- Analyze tasks and find opportunities to increase efficiency
- Manage budget proposals, preparation, and reporting
- Identify new business opportunities.
- Collaborate with the CTO (chief technical officer) and I.T. staff (information technology) to monitor and manage I.T. financial systems
- Hire and manage financial staff
- Ensure compliance with legal and insurance requirements
The CFO is responsible for directing and creating the organization’s financial strategy. With other executives, which include the C-Suite and CEO, the CFO establishes the company’s financial priorities, thereby ensuring that the set goals are achieved by the organization.
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When it comes to reports and evaluation, CFOs are also responsible for ensuring the accuracy of all activities and that the company complies with local, regional, and state laws.
If they work for a public company, this means staying within the U.S. reporting, securities, and Exchange Commission (SEC) requirements.
Chief Financial Officer – Salary
The salary of a CFO varies by location, level of experience, and size of the company they work for. Fortune 500 CFOs, for example, will earn higher wages than those for small companies and beginners. However, regardless of these criteria, people in CFO positions usually benefit well by six figures, as shown below:
- Average Annual Salary: $ 395,004
- Top 10% Annual Salary: $ 599,535
- Low 10% Annual Salary: $ 214,795
CFO positions require significant investment in education. Obtaining an MBA from a high school business can cost more than $ 100,000 in education alone.
Education, Training, And Certification
Many employers want their CFO to have qualifications and extensive experience in finance, accounting, and management.
CFOs usually get a job after holding previous positions as director, accounting director, or deputy finance president.
- Elective Graduate Degrees: Employers often offer preferences to candidates with an MBA or master’s degree in accounting, finance, or similar degrees. Many may need even higher degrees.
- CPAs and CMAs are welcome: Certificates and accreditation can help you get hired. According to business management company Robert Half, employers who want to fill a CFO position tend to look for people with special credentials. A CPA or CMA can attract many jobs.
- More information: CFOs usually have 10 years of work experience in their field before joining the C-suite. Employers and hiring groups will be looking for a history of growing roles in accounting and finance for their qualified employees.
CFOs are tasked with coordinating the company’s financial policies, and they may be asked to manage various tasks and teams related to budgeting, financial data, and reporting. Most CFO skills are written in cover letters and in the job description category in resumes.
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Accounting Experience And Skill
Many employers prefer people with advanced accounting qualifications for good reasons. CFOs are requested to oversee the strategy and direction of the accounting and finance team.
They must have a comprehensive knowledge of all generally accepted accounting policies and principles.
CFOs are charged with the responsibility of providing a comprehensive report and statement, including shareholders’ reports, income statements, and tax returns.
Management And Compliance Information
Legal, insurance, and regulatory requirements vary from company to company and industry. CFOs must ensure that their organization adheres to local, regional, and organizational rules.
Leadership And Management
In most companies, the CFO heads the accounting and finance team. They must have strong leadership and oversight skills.
The CFO liaises with the entire executive committee. They explain complex financial problems and objectives to managers, investors, and partners in other departments.
Depending on the needs of the department and their company, CFOs may need to know a variety of accounting software, financial, and business resources packages.
The Bureau of Labor Statistics states that the activities of senior management, including CFOs, will grow by 4% between 2019 and 2029. However, the appearance of work is stronger in some job titles than in others.
For example, the performance of CEOs is expected to decrease by 10% over the next few years, while the responsibilities of general managers and project managers are expected to increase by 6%.
Most CFOs work in different office environments as it mostly involves travels and tours depending on the organization’s size. They spend many hours sitting with a computer, reviewing reports, financial data, and industry trends.
They may also be invited to travel to meet with investors and business partners. CFOs should be prepared to present to the board, partners, and colleagues.
Like other senior executives, CFOs typically work more than an average of 40 hours per week. Participation comes with a lot of work, which can be stressful and challenge the work-life balance.
The Job of A Chief Financial Officer (CFO) is a demanding but high-paying one. Depending on the organization’s size, it also involves many travels as financial auditing is not something you take lightly. Any aspiring for this position needs to make their skills and proficiency a matter of utmost importance.