How to Become a CFO: Skills & Qualifications

CFOs are in charge of a wide variety of activities that impact a company’s growth. It takes a lot of effort and determination to rise to the top of a company’s financial hierarchy. While the scope of responsibilities varies by sector and company size, it’s worth noting that everyone’s journey to becoming a CFO is unique.

Tasked with ensuring the business maintains a positive financial outlook, the CFO needs to confirm the go-ahead for new ventures or partnerships. As with every executive role, being a CFO entails long-term dedication and careful preparation.

Let’s see what the path to CFO entails, their responsibilities & the skills and qualifications needed to become a chief financial officer.

What Is a Chief Financial Officer?

A Chief Financial Officer (CFO) is in charge of a company’s financial operations and is active in budgeting and financial reporting. They are heavily involved in strategic planning; they will help formulate and implement business goals while monitoring key performance metrics in partnership with other stakeholders. The role also includes acting as a strategic advisor to the CEO, being a team leader to other employees, and interacting with third parties relating to company finances.

Responsibilities

CFOs are the ones included in any financial decision that is made within an organization. The exact duties depend on the scale of the company and the industry itself. They’re in charge of running departments involved in sourcing, pricing, savings, taxes, debt management, and accounts payable.

The day-to-day duties of these professionals include:

• Maximizing profits while mitigating financial risks and losses.
• Managing investment portfolios and conducting audits.
• Supporting expansion by raising capital or taking a private company public.
• Developing financial strategies for mergers or acquisitions.
• Analyzing market trends and generating economic forecasts.
• Ensuring compliance with laws and regulating agencies.
• Recording of company-wide transactions.
• Reporting on expenditure and projections.

The Skills & Qualifications of a CFO

With such responsibilities, one has to keep up with industry trends and have the right academic background and credentials.

What degree does a CFO need?

A bachelor’s degree is the first step toward a promising finance career. Aspiring CFOs can establish a strong foundation with a bachelor’s degree in business management, finance, accounting, or economics. During their undergraduate studies, ambitious students cultivate leadership skills crucial for managerial positions.

Since the position of CFO includes leadership and management roles, earning an MBA will help you gain experience and prepare for the job. Obtaining an MBA or an MBA with a specialization in finance program will help finance professionals advance in their careers.

Essential CFO skills

As a CFO, almost anything you do entails some level of leadership. CFOs have to be strategically minded, execute strategies and need awareness of shifting markets and competitor behavior. Accounting and tax knowledge are also fundamental for a CFO.

Chief executives possess the following qualities:

• Communication
• Decision-making
• Leadership
• Management
• Problem-solving
• Time management
• Data skills

Credentials

A financial professional may be required to obtain Certified Public Accountant (CPA) licensure via state board approval in order to become a CFO. They may also be required to be a Certified Management Accountant (CMA) or a Chartered Financial Analyst (CFA).

Obtaining such certifications typically entails meeting experience and educational standards, as well as passing a test.

What Is a Typical CFO Career Path?

When pursuing a finance degree, students can participate in hands-on internships and apply what they’ve learned in class to real-world situations in business finance. Before becoming CFOs, many professionals serve in finance-related positions. Banking, accounting, trading, consulting, financial reporting are all options for a fulfilling finance career.

Finance professionals can work in almost any sector since finance is an essential part of any economically viable company. Specializing in one field, on the other hand, improves one’s chances of success. Aspiring CFOs should develop specialized knowledge on their desired career path. It’s beneficial to learn about industry-specific tax laws, legislation, budgeting procedures, investment methods, and other facets of business such as mobile banking and international finance.

Particular roles that lead to becoming a CFO are:

• Finance Manager
• Operations Manager
• General Manager

You’ll wear several different hats as a CFO during the day. In order to climb the corporate ladder and become successful, you must also be enthusiastic and aware of the duties and commitment required for this role. Prepare to demonstrate your adaptability, versatility, and willingness to be constructive in fostering long-term development.

Challenges Faced by CFOs in Today’s Business Environment

The job of a Chief Financial Officer has changed a lot over time due to the constantly changing business world. Nowadays, CFOs face many challenges that require smart financial skills, flexibility, and strategic thinking, all in a fast-paced environment.

CFOs are increasingly tasked with leveraging technological innovations to streamline financial processes, enhance data analytics, and drive business insights. Adopting and integrating new financial technologies while ensuring data security and compliance poses a significant challenge.

With the increasing reliance on digital platforms and data-driven decision-making, CFOs face the critical challenge of safeguarding sensitive financial information from cyber threats. Upholding data privacy standards while leveraging data for strategic insights is a delicate balancing act.

Acquiring and retaining top financial talent equipped with the necessary technical skills and a strategic mindset is a persistent challenge. CFOs need a competent team capable of handling multifaceted financial tasks in a rapidly evolving business environment.

Is CFO the Right Career for Me?

If you’re considering a career as a CFO, it’s important to bear in mind that this role demands a unique blend of skills and personal attributes. As you progress in your career, you’ll need to exhibit strong leadership capabilities, possess a keen understanding of financial intricacies, and have the foresight to navigate complex financial landscapes. 

You’ll also need to be adaptable to evolving market dynamics and committed to ethical conduct and compliance. If you enjoy working in a dynamic, data-driven environment and relish the challenge of steering financial strategies, pursuing the path of a CFO may be the perfect fit for you.

In addition, the journey to becoming a CFO requires an ongoing commitment to learning and honing one’s skill set. It demands the skill to navigate shifting industry trends, a dedication to upholding ethical standards, and the resilience to overcome multifaceted challenges in the financial realm.

Make the first step by enrolling in our Bachelor of Arts in Economics & Finance program, or consider the Master of Business Administration with a concentration on Economics & Finance program to get one step further into your career as  CFO.

Frequently Asked Questions

What educational background is essential for aspiring CFOs?

Typically, CFOs have a bachelor’s degree in finance, accounting, economics, or business administration. Many pursue further education like an MBA, specializing in finance, to enhance their leadership and managerial skills.

What skills are crucial for a successful CFO career?

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.

Do CFOs need professional certifications?

While not mandatory, certifications like Certified Public Accountant (CPA), Certified Management Accountant (CMA), or Chartered Financial Analyst (CFA) can significantly bolster one’s credentials and expertise.

What career path typically leads to becoming a CFO?

Aspiring CFOs often start in finance-related roles such as financial analyst, accountant, or financial manager. They gain experience, move up the corporate ladder into roles like finance manager, operations manager, or general manager before advancing to the CFO position.

What industries or sectors do CFOs usually work in?

CFOs can work across various industries, including finance, healthcare, technology, manufacturing, and more. They are essential in any sector requiring financial management for sustainable growth.

How important is industry-specific knowledge for CFOs?

Industry-specific knowledge, including tax laws, budgeting procedures, and investment strategies, is crucial for CFOs. Specializing in a particular sector can enhance one’s chances of success.

What is the role of a CFO in a company’s growth and strategic decisions?

CFOs play a key role in a company’s growth by overseeing financial operations, managing risks, making strategic financial decisions, and advising on mergers, acquisitions, or raising capital. They collaborate closely with other executives to align financial strategies with business goals.