How to become a CFO

How to become a CFOFor many professionals in finance and accountancy, a Chief Financial Officer (CFO) role is the pinnacle position attained after many years of hard work and experience. If you have your eye on the C-suite, read on to learn more about 8 of the key areas in which you need to excel to become a CFO.

What does a CFO do?

Working closely with the CEO and reporting directly to owners and shareholders, CFOs are responsible for overseeing financial operations and decisions of a company. CFOs have vast influence over their company and share responsibility for overall performance with the CEO, implementing modernisation, growth and development through various business strategies and financial initiatives.

How long does it take to become a CFO?

Due to the responsibility and seniority bestowed upon them, the career path to become a CFO is naturally a long one; many CFO jobs on GAAPweb require candidates to have 10-15 years of accounting experience. Becoming CFO should be a long-term goal – expect to hold many finance positions at progressing levels of responsibility before reaching the top.

How to become a CFO: 8 key steps

  1. Cultivate a broad financial background.
  2. Gain strong management skills.
  3. Enhance your education.
  4. Develop your relationship building skills.
  5. Build a trusted and talented team.
  6. Understand the latest technology.
  7. Know your business inside out.
  8. Stay loyal to your company.

 

  1. Cultivate a broad financial background.

Sound understanding and experience of finance – analysis, risk, compliance, budgeting and other accounting principles – are essential for CFO candidates. Gained over many years, your experience should be broad and varied. It is wise to get into industry as soon as possible after completing your accounting qualification as you want as much commercial exposure and in-house experience as possible.

Your responsibilities as CFO will be far broader than at any other level and, due to management and business development obligations, you may not have any hands-on finance duties at all. It is therefore advisable to gain experience in as many different accounting roles as possible, allowing you to have an informed overview of your entire finance department.

  1. Gain strong management skills.

Nearly as important as a financial background are management skills and experience. As CFO you oversee the entire finance function – tax, investments, debt management, accounts payable, purchasing and pricing departments are all under your leadership and, depending on the scale of your company, that can include many employees.

It is important that you are a capable leader with many years’ experience of successfully managing, motivating and mentoring teams. Finance Directors and Finance Managers make good candidates for CFO positions thanks to their combination of technical financial knowledge and people management skills.

  1. Enhance your education.

Alongside an ACCA, ACA or CIMA accounting qualification, potential CFOs are likely to have a degree in a related field such as finance, economics or business. Many successful CFOs also gain a Master of Business Administration (MBA) degree due to the leadership, management and business decision-making skills developed by the qualification. Potential CFO qualifications also include a variety of short courses in operations, risk, business and other relevant fields. Available online, these can act as high-quality supplements to your existing qualifications.

  1. Develop your relationship building skills.

Managing the finance department, influencing other senior executives and liaising with investors – all primary duties of any CFO – require high-level communication, interpersonal and relationship building skills. It is vital to maintain good relations with the CEO and your direct reports in finance, as well as with external individuals with a vested interest in your business.

Building solid relationships with key figures across your business will not only aid the development of vital CFO skills but being a known and trusted individual in your company, you will be in a much better position to move up internally towards your goal position.

  1. Build a trusted and talented team.

A lot will be expected of you as CFO, but the simple fact is that you cannot do it all yourself. CFOs are required to play multiple roles, many of which are not purely financial, so are expected to know a little about every aspect of the business. The key to not getting in over your head is to build a team of trusted experts around you who can supply the finer details as and when required.

  1. Understand the latest technology.

It is crucial for prospective CFOs to stay on top of technological developments in finance and to understand the various risks and benefits associated with different platforms, systems and processes. Entering the role with a sound understanding of the technological landscape – and then staying abreast of advancements as they happen – can put you in an excellent position to build a finance department who are tech savvy and, in turn, have the best chance at success.

  1. Know your business inside out.

Being a CFO is not all about finance. A solid grasp of the product or service, the customers, the operations, the suppliers, the shareholders and the employees of your business is imperative for your success and to ensure that you fulfil your business development responsibilities in the board room.

  1. Stay loyal to your company.

According to a study of the career path of every CFO in the Fortune 100 carried out by Russell Reynolds Associates, a massive 69% of CFOs got their jobs through internal promotion. Clearly, if you’re on a CFO career path, loyalty to your company pays off.

Loyalty is closely linked to other entries on this list. By staying with a good business, you will likely gain the broad financial background, company-specific knowledge, management skills, solid internal relationships and the talented, trusted team required to succeed as a CFO. Do you have the credentials to thrive as a Chief Financial Officer? Search and apply for the latest CFO jobs on GAAPweb today.

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