Chief Financial Officer (CFO) Career Guide

What is a chief financial officer?

A chief financial officer, or CFO, is one of the top bosses at a company who makes sure the company’s money is handled right. They look at all the numbers and data to help the company make smart money moves, and they play a big part in deciding how to spend and save money so the company can grow and make more profit.

CFOs also have the big job of talking about the company’s money situation with important people like investors and the team running the company. They help everyone understand where the money is going and what that means for the company’s future.

Duties and responsibilities

• Money management: They manage all the money stuff like budgets, predicting future money needs, and finding ways to get more money if needed.
• Keeping track: They’re in charge of making sure all money records are correct and handle the official money reports for the company.
• Smart investing: CFOs decide the best ways to use the company’s money to make sure it grows.
• Risk checking: They look out for any financial risks and figure out how to deal with them.
• Legal stuff: Sometimes they even look after the legal side of things to make sure everything the company does follows the law, especially when it comes to money.

Work environment

CFOs usually work in an office at the company’s main building. They work closely with other big bosses like the CEO and spend a lot of time in meetings, planning the company’s strategy and meeting with people outside the company like investors and banks.

Typical work hours

CFOs usually work full time, but they often work more than the usual 40 hours a week because they have to keep up with the world of finance across different time zones. They need to be ready to work at odd hours and might need to travel a lot for work. This job needs someone who is really dedicated and flexible.

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How to become a chief financial officer

If you’re aiming to become a CFO, you need a mix of the right education, real-world finance experience, and leadership skills. Here’s a step-by-step plan to get there:

Step 1: Earn a bachelor’s degree

Start with a degree in finance, accounting, economics, or business administration. This will teach you the basics of how money works in a business.

Step 2: Work in finance

Get a job like a financial analyst or accountant. These entry-level jobs help you understand how money flows in a business and teach you the basics of financial management.

Step 3: Go for a master’s degree

Think about getting an MBA or another graduate degree focusing on finance. This higher education will help you grasp business strategies and complex financial management better.

Step 4: Get certified

Boost your job prospects with certifications like Certified Public Accountant (CPA), Chartered Financial Analyst (CFA), or Certified Management Accountant (CMA). These show you’ve got advanced skills in finance.

Step 5: Gain leadership experience

You’ll need to prove you can manage and lead people. Work your way up through finance jobs like finance manager or director of finance. These jobs will give you a chance to lead teams and make big financial decisions.

Step 6: Understand the business

A good CFO understands not just the finance, but the whole business. Get involved in different parts of your company, keep up with industry news, and maybe even work on projects outside of finance.

Step 7: Apply for CFO jobs

Once you’ve got the right education, skills, and experience, start applying for CFO jobs. Make sure your resume talks up your financial skills, leadership experience, and how you’ve helped businesses succeed.

Once you’ve got the job, keep learning. New laws and financial tricks come up all the time. Consider taking some courses to stay on top:

• Think Like a CFO Specialization: Learn the finance language and solve financial issues in your company.
• Nailing Your First Quarter as a CFO: Perfect for new CFOs, this course helps you nail the first 100 days on the job.
• Chief Financial Officer Leadership Program: For more experienced CFOs, this course tackles change management, financing strategies, and more, taught by a seasoned pro.

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How much do chief financial officers make?

The compensation for a CFO varies significantly based on several factors. One of the primary influences is the size and industry of their company. Larger companies with more complex financial structures often pay higher salaries than smaller companies. Experience also plays a significant role, as those who have proven their abilities in financial management over time often command higher salaries.

Education level can also impact their salary, with those holding an MBA or other relevant advanced degrees potentially earning more. Bonuses and stock options often form a significant part of a CFO’s compensation package, especially in large publicly traded companies. The economic health and profitability of the company can also affect their compensation, as can the cost of living and wage levels in the geographic location of the company’s headquarters.

Browse CFO salary data by market

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Types of chief financial officers

Here’s a rundown of the various kinds of CFOs:

Corporate CFO

These CFOs handle the money matters of private companies. They make big decisions about investments and financial strategies. Their job includes planning finances, managing risks, keeping records straight, and reporting finances to the big bosses and people who have invested in the company.

Public company CFO

CFOs in public companies deal with the financials of companies whose stocks are traded publicly. They must follow strict rules set by the Securities and Exchange Commission (SEC) and keep investors happy by being clear about the company’s financial health. Their job is complex because they have to be very open about the company’s finances.

SMB CFO

These CFOs work in small and medium-sized businesses. They manage everything about the company’s finances and might handle other parts of the business too, because the company isn’t very big. Their main job is to keep the company financially healthy and growing.

Nonprofit CFO

CFOs in nonprofits manage the finances with a focus on keeping the organization running long-term and using funds efficiently. They might also lead efforts to raise money and make sure the money is spent in ways that help achieve the nonprofit’s goals.

Startup CFO

In startups, which are all about growth and expansion, CFOs plan the finances, find ways to get money, manage cash, and provide financial strategies to help the startup thrive despite financial ups and downs.

Healthcare CFO

These CFOs work in hospitals or other healthcare settings. They take care of budgeting, financial reporting, handling bills for patients, and developing strategies to keep the healthcare organization financially sound despite the complex nature of healthcare financing.

Government CFO

In government, CFOs manage the money for a specific agency or department. They do things like budgeting, reporting, and making sure all financial practices follow the law. They also work on strategies to manage the public’s money effectively.

Financial services CFO

These CFOs oversee the financial strategies and manage risks for banks or other financial institutions. Their key roles include ensuring that the institution stays financially healthy and follows all industry regulations.

Fractional CFO

Fractional CFOs work part-time or on a contract basis, often for several small businesses at once. They provide expert financial advice, help with planning and analysis, and assist in making smart financial decisions. This is a great option for small businesses that need financial expertise but can’t afford or don’t need a full-time CFO.

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Top skills for chief financial officers

Here’s what you need to succeed in this role:

• Financial expertise: CFOs need to understand how money affects business choices and be able to work with complex financial data. These skills help guide the company toward growth and higher profits.
• Strategic thinking: A top CFO doesn’t just handle money; they help shape the company’s future. Understanding the market, knowing what competitors are doing, and seeing the big business picture are crucial.
• Leadership: Great leadership means motivating your team, setting clear goals, and creating a workplace where people aim for excellence and accountability. You’ll also represent the company’s financial side to investors and everyone else who cares about how the company is doing.
• Communication skills: CFOs must talk about complex financial stuff in ways that everyone can understand—from the people who work at the company to investors and regulators. Good communication means you can explain the financials clearly and make sure everyone understands the company’s financial health and plans.
• Regulatory knowledge: CFOs have to make sure the company’s financial actions are legal and up to standard. Staying compliant not only keeps the company out of legal trouble but also protects its reputation.

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Chief financial officer career path

Here’s a typical roadmap for reaching this senior financial position:

Gain early experience

After college, dive into roles that build your financial toolkit. Jobs in financial analysis, auditing, or accounting are common starting points. These positions help you grasp the finer points of financial management and prepare you for more complex tasks.

Take on senior roles

As you grow in your career, aim for higher positions within the finance department such as senior financial analyst, finance manager, or controller. These roles come with more responsibility and involve in-depth financial planning, reporting, and compliance tasks.

Advance to director or vice president

The next big step is to become a director or vice president of finance. These positions have you overseeing the company’s financial operations, leading teams, and making key financial decisions. It’s also a good time to boost your qualifications with advanced certifications like a CPA or an MBA.

Become a CFO

With proven expertise and leadership skills, you might then step into the CFO role. You’ll oversee all of the company’s financial functions, from strategic planning and risk management to reporting financial status to stakeholders like the board of directors.

Beyond CFO

While being a CFO could be the peak of your finance career, some move on to even broader roles like CEO or COO. Others might choose to serve on boards or switch to consulting roles after a successful tenure.

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Similar job titles

• Controller
• Finance Director
• Financial Manager
• Treasurer
• Treasury Manager
• Accounting Director
• Financial Analyst

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Chief financial officer position trends and outlook

Here’s a look at the latest trends and the job outlook for CFOs:

• Strategic influence: CFOs are increasingly seen as key advisors to the CEO, heavily involved in strategic planning and company strategy beyond just the financials.
• Digital and tech integration: With the surge in technology and data analytics, CFOs are leading the adoption of advanced tools like AI, machine learning, and predictive analytics to enhance financial decision-making and operational efficiency.
• Focus on sustainability: There’s a growing emphasis on sustainability and corporate responsibility. CFOs are playing a crucial role in managing ESG factors, addressing investor and regulatory expectations regarding sustainable practices.

Employment projections

The U.S. Bureau of Labor Statistics predicts a 6% growth in employment for top executives, including CFOs, from now through 2031. This growth reflects the ongoing need for sophisticated business and financial strategies in a complex business environment.

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Chief financial officer career tips

Understand the broader business landscape

A top CFO needs a solid grasp of not just the finance area but the entire business landscape. Understand how each department contributes to the company’s financial health and how external factors like the economy or industry trends could impact performance.

Build strong relationships with other execs

You’ll work closely with other top executives like the CEO and COO. Strong relationships can lead to better communication and decision-making. Participate actively in meetings, social events, and team-building activities to align everyone toward common goals.

Stay updated with financial regulations

Finance is a heavily regulated field, and staying compliant is crucial. Regularly review updates from regulatory bodies, attend seminars, and consult with legal experts to avoid any legal issues that could harm your company.

Build your network

Networking is key in the finance world. Building a strong network can provide support, insights, and new opportunities. Engage with professional organizations such as:

• The Financial Executives Networking Group (FENG)
• The American Association of Finance & Accounting (AAFA)
• The Association for Financial Professionals (AFP)
• CFO Leadership Council

Embrace technology

Technology is reshaping finance. Be tech-savvy and ready to use new tools that enhance financial reporting, risk management, and strategic planning. This could mean adopting new software solutions or integrating AI and machine learning into your operations.

Commit to continuous learning

The financial landscape is ever-changing. Keep your knowledge and skills sharp with ongoing education. Read industry publications, attend relevant conferences, and pursue further education like an MBA or certifications such as Certified Management Accountant (CMA).

Focus on strategic thinking

Today’s CFOs need to think strategically. You should be involved in setting financial goals, planning for the future, and making critical business decisions. Improve your skills in scenario planning, risk assessment, and strategic financial planning.

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FAQs