According to the statistics, as many as 1 out of 3 CEOs is concerned that their CFO is not prepared well for the upcoming challenges. It is therefore worth asking not only how to become a CFO, but also how to become a good CFO. What skills should one possess to perform this function properly? How to become a CFO? Read our article to learn key steps to becoming a CFO.
How to become a CFO? – table of contents:
What is the role of a CFO?
A career in financial services is a dream of many people. Employees who start working in finance departments often aspire to reach the highest positions, and eventually become a CFO. The CFO (Chief Financial Officer) is responsible for managing the company’s finances.
Their duties include tracking cash flow, analyzing strengths and weaknesses of the company to propose corrective action plans when necessary, and preparing accurate forecasts. These actions are taken so that the management could make decisions on issues regarding future investments or budget cuts.
The role of the CFO goes beyond the traditional view of the accountant – the person who counts a company’s financial resources. A modern CFO uses financial analysis to either support or challenge a company’s key decisions, as well as formulate its strategy. An important factor in these processes is the business environment in which the company operates, hence the CFO must constantly interact, observe and communicate with it.
How to become a CFO? If you want to become a CFO, you should posses certain qualities that will allow you to consciously and effectively hold this position. Both hard and soft skills are important. Surprisingly, it is not enough to have analytical skills only to become the CFO.
Key skills of the CFO include:
- Leadership skills – The CFO must possess necessary leadership and communication skills. They must be able to analyze the financial situation of the company, advise and support all employees, both those reporting to them in the financial departments and those on the board of directors, as well as other leaders. What is more, they should provide advice to all employees who have questions in their area of expertise.
- Operational skills – The CFO must have a good understanding of both the internal and external environment of the company. They should be able to use this knowledge to provide an independent perspective and constructively manage the company’s financial processes.
- Controlling and analytical skills — In an increasingly global and volatile environment with additional regulatory burdens, it is often the CFO’s job to ensure that risks are properly assessed and mitigated, as well as to check compliance with applicable regulatory and other legal requirements.
- Strategic skills – The CFO supports the strategy development and its execution on a daily basis. They set priorities and ensure that the strategy is in line with all processes taking place in the company.
How to become a CFO? The CFO, apart from predispositions stemming from their personality, should also possess certain skills acquired through education and work experience.
- proven experience as a CFO or in a similar role,
- in-depth knowledge of corporate financial law,
- excellent knowledge of data analysis and forecasting methods,
- proficiency with financial management software,
- ability to develop strategies and solve problems,
- strong leadership and organizational skills,
- excellent communication and interpersonal skills,
- analytical mind that works well with numbers.
Typically, a CFO will have a college degree and technical accounting qualifications such as CPA, ACCA, CIMA. However, leadership and communication skills are increasingly important. People with a master’s degree in accounting, bookkeeping or finance often become CFOs. It is also worth thinking about MBA studies – Master of Business Administration with emphasis on Accounting/Finance or Master of Science in Finance (MSF).
CFO career path
How to become a CFO? Most CFOs have experience in such departments as financial planning and analysis, control and treasury. This can be achieved either through promotion and adopting senior roles within the company or time spent at an accounting firm before moving into the industry.
Today, the role of the CFO can’t be limited to data analysis. CFOs must recognize the risks and opportunities behind the financial data and act as a strategic business partner to the CEO. However, in order to do this, they need to possess strong leadership and communication skills. A good chief financial officer is key to the success of any company, and a bad one may cause that organisation to fail.
The most important questions
What are the responsibilities of a CFO?
CFOs are responsible for managing the company's finances. Their duties include tracking cash flow, analyzing strengths and weaknesses of the company so that corrective action plans could be implemented, and financial forecasting.
What is the preferred degree at this position?
A master's degree in accounting, bookkeeping, or finance.
What is the career path of a CFO?
This position can be achieved either through promotion and holding senior roles within the company or time spent at an accounting firm before moving into the industry.