A CFO is a corporate executive job that’s responsible for the financial planning and record keeping of a company, as well as managing the financial risk. The CFO reports to the company’s higher management which usually includes the Chief Executive Officer (CEO). This is one of the highest positions in large companies. In general, businesses with less than $10 Million in yearly revenue do not have a real need for a CFO role. For a company to require a CFO they will usually be much larger and more well established.
A CFO job is not one that you can get right out of school. It takes many years of experience to build up the necessary skill set to be an effective CFO. A CFO of a mid to large sized company usually is going to have a minimum of 10-15 years of experience. It’s basically as high as you can get in a company besides the CEO role. It takes a wide diversity of experience and knowledge to be a successful CFO.
CPA stands for Certified Public Accountant. 45 percent of CFOs are also CPAs. This is by far the most common path to becoming a CFO. The job requires extensive financial and accounting knowledge. Spending a few years as an accountant lies the ground work and experience needed to understand how business financials should function properly.
MBA stands for Master of Business Administration. This is a graduate degree that usually takes about two years to earn from a reputable college or university. It’s not a requirement for becoming a CFO, but it does give you a competitive advantage. The best path would be to first spend a few years as an accountant and then earn an MBA to take your career to the next level.
The top four accounting firms are PricewaterhouseCoopers, Deloitte, Ernst & Young and KPMG. Working for one of these companies is one sure-fire way to get ahead in your career. These companies all recruit from the best schools in the country and it takes some hard work to get a job for them. Having at least a couple years of experience at one of these firms will ensure that you are exposed to the highest levels of business and finance. There’s plenty of room for advancement at one of these large firms, but they can also be used as a way to jump up a level and get farther ahead at other companies down the road.
Another position that will give you a real advantage at getting a CFO position later in life is working in the Corporate Treasury. The treasurer of a company is responsible for cash management, managing interest and commodity risks as well as financial investments and banking contacts. These types of roles will only be present in the largest companies and will give you exposure to higher level financial interactions. This type of experience is great preparation for becoming a CFO.
A company’s controller is the chief accounting officer that heads up the accounting department. They usually report to the CFO. This is the stepping stone position above accountant or CPA that leads to becoming a CFO. This role requires a balance between managing a team of other people and understanding the financial details of the company. Tasks for this job include reporting, accounting, budgeting and compliance. Getting a job in this type of position is a great option for preparing your career for a job as CFO.