A chief financial officer is a C-level executive position responsible for deciding how a business can best allocate resources to maximize profits. This position requires several years of professional accounting and finance experience.Here’s what to know about a chief financial officer’s needed skills, salary and how to become one.
What Is a Chief Financial Officer?
A chief financial officer serves as a company’s main financial leader. They employ data analysis and strategic thinking to make decisions in the best interest of meeting the business’ financial goals.
What Do Chief Financial Officers Do?
The duties chief financial officers perform can include overseeing investment portfolios, crafting financial reports, developing financial forecasts and tracking expenses.
Chief Financial Officer Responsibilities
- Advise other executives and board members on data-driven decisions.
- Verify financial reports.
- Monitor cash flow.
- Assess markets and prepare financial forecasts.
- Present research to financial stakeholders and decision makers.
- Manage the company’s investment portfolio.
Chief Financial Officers Within a Company
A chief financial officer is the company’s top financial decision maker. This C-suite role oversees the work of finance directors and controllers who manage and guide the everyday activities of accounting and finance employees.
Importance of Chief Financial Officers
Companies rely on chief financial officers to make profitable decisions based on their market assessments and financial forecasting abilities.
What Skills Are Needed to Be a Chief Financial Officer?
Qualifications to Be a Chief Financial Officer
- Extensive finance and accounting knowledge.
- Management experience.
- Understanding of best practices for investing.
- Ability to prepare financial forecasts and assess markets.
- Strong data analysis skills.
- Experience making data-driven decisions.
- Familiarity with the accounting and finance software tools their direct reports use.
Chief Financial Officer Prerequisites
- A bachelor’s degree in a relevant field.
- Accounting, financial management and auditing certifications can be beneficial.
Chief Financial Officer Hard Skills
- Conducting research.
- Analyzing financial data.
- Using data to drive financial decisions.
- Managing investments.
Chief Financial Officer Soft Skills
- Strategic and analytical thinking.
- Strong leadership and communication skills.
- Confident decision making.
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How to Become a Chief Financial Officer
Chief Financial Officer Education and Experience
A chief financial officer typically holds a bachelor’s degree in a relevant field like accounting, finance, business or economics. They are not necessarily required to have a master’s degree, but some do bring advanced degrees. Professional accounting and finance experience is most important, with a minimum 10 years on the job usually required. CFOs also commonly bring certifications in accounting, auditing or financial management.
Chief Financial Officer Certificates and Courses
Chief Financial Officer Career Path
The track to becoming a chief financial officer often starts with an entry-level job as an accountant or financial analyst. Next, a professional will take on leadership positions like controller or finance director to further hone their skills and spend time handling management-level responsibilities.
Chief Financial Officer Salary and Job Outlook
U.S. Bureau of Labor Statistics data shows employment for “top executives” overall is expected to grow by 6 percent between 2021 and 2031, yet employment among “chief executives” is projected to decline by 7 percent during that same period.
The full compensation package for a chief financial officer depends on a variety of factors, including but not limited to the candidate’s experience and geographic location. See below for detailed information on the average chief financial officer salary.
FAQs
Qualifications to Be a Chief Financial Officer
What are the skills needed for a chief financial officer? ›
CFOs need strong leadership, decision-making, problem-solving, and communication skills. Proficiency in financial analysis, risk management, strategic planning, and compliance with regulatory standards is also vital.
What does a chief financial officer do? ›
The term chief financial officer (CFO) refers to a senior executive responsible for managing the financial actions of a company. The CFO's duties include tracking cash flow and financial planning as well as analyzing the company's financial strengths and weaknesses and proposing corrective actions.
How do you become a CFO? ›
To become a CFO, you must start with a strong finance, accounting, or business background. A bachelor's degree in any of these programs will teach you management fundamentals, including marketing and strategic thinking skills. Next, it is crucial to gain work experience as a financial analyst, accountant, or similar.
What it takes to be a good CFO? ›
Leadership skills
Today's CFOs are expected to envision, understand, and work toward the bigger picture. To achieve this, they engage in tactical problem-solving, take crucial decisions, and manage relationships with stakeholders.
What skills does a finance officer need? ›
You'll need:
- knowledge of economics and accounting.
- business management skills.
- maths knowledge.
- analytical thinking skills.
- financial management skills.
- leadership skills.
- the ability to use your initiative.
- to be thorough and pay attention to detail.
Education. The majority of CFOs will understandably have an educational background in finance, business, economics or management. A typical path would be a bachelor's and master's degree in accounting or other finance-related studies, alongside the ACCA qualification.
What does a CFO do on a daily basis? ›
He helps both emerging and mature companies manage issues such as ensuring sufficient cash flow to sustain growth, enhancing working capital, freeing up money tied up in inventory, determining where to concentrate sales efforts, deciding whether to sell the business, and more.
Who is the highest paid chief financial officer? ›
Based on full compensation data for 2022, the top paid CFO in the US is Joe Berchtold of entertainment group LiveNation (52.4M)–capping a bumper executive year for the entertainment concert company whose CEO Michael Rapino also bagged the highest earning chief executive in the US at $139 million.
Is chief financial officer hard? ›
Being a CFO is difficult but with education and experience, individuals in the role thrive.
Most Common Degrees for Chief Financial Officers
While a degree may not be an absolute requirement for becoming a Chief Financial Officer (CFO), understanding the educational background of successful CFOs can provide valuable insight into the skills and knowledge that contribute to effective financial leadership.
Is a CFO job stressful? ›
CFOs would face challenges in maintaining a work-life balance as the role's demands might require long hours of travel and constant availability. This can strain relationships with family and friends, adding to extra stress and emotional burden.
Who is the youngest CFO? ›
At the age of 26, Watson became the youngest ever CFO of a NYSE-listed company.
What type of person makes for a good CFO? ›
Essential Qualities and Aptitudes of a Capable CFO
An effective CFO should possess a broad range of qualities, including strong analytical skills, technical financial expertise, superior communication skills and the capacity to think strategically.
What skills are most important for CFO? ›
Critical thinking and problem-solving skills are essential, as is the ability to communicate financial information clearly to non-finance colleagues. These CFOs should also be developing their understanding of the regulatory environment and tax implications for business decisions.
What is the most difficult decision for a CFO to make? ›
The most difficult decisions for a CFO often involve balancing risk and reward in financial investments, determining the right time for expansion or cost-cutting, and allocating capital between competing projects or departments.
What are the qualities of a CFO? ›
A comprehensive understanding of accounting and financial principles, as well as a thorough understanding of tax law, are not the only requirements for a CFO. They must also have a strong grasp of technology and the ability to operate financial software.
What are the core competencies of a CFO? ›
Senior CFOs are expected to have a comprehensive skill set that includes a strategic vision for the company's financial future and the ability to make high-stakes decisions. They must possess exceptional leadership qualities, with the ability to influence and drive change across the entire organization.
What are the skills needed in chief? ›
A CEO needs to have strong leadership and team management skills, able to lead and motivate their team to achieve their goals. They must be able to build and maintain positive relationships with their employees, stakeholders, and partners, creating a culture of collaboration and trust.
What are the role requirements for a CFO? ›
A CFO must possess strong interpersonal and communication skills, both verbally and written, and must be able to engage with staff at all levels of an organisation. In publicly listed companies, a CFO is often required to represent the company at investor relations meetings.
