How To Become A CFO: 8 Essential Tips
In a company, the Chief Financial Officer (CFO) is one of the highest-ranking executives and reports directly to the CEO. While the role of the CFO varies from organization to organization, their main responsibility is to manage the company’s finances, including profit and loss reporting, budget allocation, financial forecasting, and financial risk management.
Many professionals in finance and accounting aspire to become CFOs, who operate at the highest levels of business. To become a CFO, however, you need more than numbers expertise since you must be able to make executive decisions and lead your company’s finances. To enhance your application process for a CFO position, you should enhance your skills and relevant experience. This guide explores how to become a CFO in 2022 and discusses the skills you’ll need to succeed.
Are you ready to take the next step in your financial career? Let’s get started!
How To Become A CFO
1. Get Certified
To obtain a CFO position, graduates often need more than just their qualifications and rely on years of experience. Traditionally, finance chiefs rose from the accounting department, usually starting as staff accountants or internal auditors, and then becoming directors of finance, controllers, and audit managers. Almost all of the job’s responsibilities were financial, and CFOs were expected to be experts in accounting, reporting, and financial strategy. In addition to earning accounting certifications, many CFOs hold bachelor’s (and sometimes master’s) degrees in accounting or finance.
There are many routes to becoming a CFO today, and the role has expanded well beyond accounting and finance. The MBA is now a requirement for many finance chiefs. It is important for aspirants to have a solid understanding of strategy and operations so that they can be able to successfully collaborate with human resources, information technology, and risk management.
Consider adding a business school degree to your resume if your career goal is the CFO’s office. Obtaining an accredited qualification from an organization such as ACCA can also to enhance your professional skill set. The ACCA offers a Strategic Professional qualification that develops financial management and planning skills. As a member of an accredited accounting body such as ACCA or CIMA, you can take advantage of professional development opportunities, ensuring that you continue to learn long after you have completed your formal education.
2. Acquire The Necessary Technical Knowledge
Among the CFO’s responsibilities is making sure the board and CEO make financially sound decisions. As a result, the finance chief must have a strong understanding of budgeting, analysis, compliance, and other accounting principles. Look for jobs that will allow you to develop these skills.
If you’re interested in learning how to manage the books, handle reporting requirements, and make decisions about expenditures and acquisitions, you may want to consider time as a staff accountant, financial analyst, or auditor. In addition to helping you develop expertise in these areas, earning a CPA designation can also help you advance your career as a CFO.
3. Work In The Industry
An experienced chief financial officer will be able to meet the job requirements. CFOs often begin their careers at lower levels within organizations, for example, as accountants. The next step is to become a team leader, department head or financial controller within your organization, just to name a few.
The intimate knowledge of financial operations that a CFO requires makes many organizations recruit internally for such positions. It can be beneficial to work for one company for a long period of time in order to increase your chances of securing a CFO position. Start with some work experience or an internship if you have never worked in finance before. Taking part in these placements can help you develop your professional network, identify gaps in your financial skill set, and experience working in finance.
4. Develop Your Leadership And Communication Skills
In order to effectively lead their organization’s finance and accounting departments, CFOs need to be strong leaders. A candidate-driven hiring market makes it more important than ever for leaders to set a strong tone at the top in order to attract top talent and retain top performers. In addition to leading in the boardroom, they must guide fellow executives and board members to make decisions that will benefit the company financially.
Developing your communication, presentation, and team-building skills now will help you meet all of these expectations. Present to audiences inside and outside your organization, for example, or serve on committees where your leadership skills can be developed. Mentorship is also an option you may want to consider if you admire the communication skills of someone you admire.
5. Make Your CV Stand Out
As you progress from your initial finance position to the CFO’s executive level, it’s time to begin building your experience. Promote yourself whenever you can, take on more responsibilities, and begin to rise in the organization. Despite the fact that many CFOs are internal hires, keep in mind that you can move to a different company if your skills are more valuable to them than your current role.
In addition, demonstrating up-to-date industry knowledge and showing your dedication to the financial industry are also important. You can significantly enhance your application process by utilizing all of these aspects on your CV.
6. Gain A Deeper Understanding Of The Company’s Cross-Functional Operations
Management and executives from across the company must regularly collaborate with the CFO. Furthermore, the finance chief regularly makes decisions that affect the entire organization. As a result, it is crucial that the CFO has a thorough understanding of the company’s organizational structure, its most and least profitable sectors, and its competition and risks.
The two best ways to develop this deep knowledge are through cross-training and job shadowing. Consider doing a stint in the operations or manufacturing department if you’ve always worked as a staff accountant. In the event that this is not possible, consider serving on cross-functional committees as your department’s representative. Developing relationships with people outside your department can help you gain a deeper understanding of the different areas within your company.
7. Keep Up With Technology And Cybersecurity Developments
The best advice on how to become a CFO is to stay current on the latest trends in IT for both the company and its industry. Learn about emerging technologies that can help you give your company a competitive advantage by increasing efficiency and reducing risk.
As a result of the Coronavirus pandemic and an economy that has cycled from recession and widespread unemployment to inflation and labor shortages, leading the financial activities of a business has become more complex. Consumer behavior and worker expectations have significantly changed. A top finance job is a great place to be if you’re looking to make an impact on your company and your industry.
8. Apply For A Position As A Cfo
It’s time to apply for CFO positions once you have the necessary qualifications and experience. CFO positions typically require eight or more years of experience in finance, so you can use your education and professional experience to enhance your application. Your CV and cover letter should highlight your transferable skills, suitability for the company, and leadership qualities.
For advice on how to improve your application, reach out to your professional network. Remember, the key to a successful job application is resilience.