If you are someone with an interest in economics or finance looking to secure a place in the boardroom then the CFO position is for you. In this fast-paced, technological, and ever-changing world the goal of most private companies is still profit-making. But being a CFO is not just about crunching numbers or ensuring liquidity, it is much more than that. Before embarking on that journey, it is important to understand more about who a chief financial officer is, what CFO roles and responsibilities are, and what career path you should follow to become a CFO. Who is a CFO? The full form of CFO is chief financial officer. To put it loosely a CFO is a person managing the financial operations and strategies of a company. They work directly with the CEO, giving substantial inputs on company investments, financial matters, capital structures, and the company’s strategy from a financial perspective. What does a CFO do? Traditionally, CFOs have been known to handle the financial aspect of the organization while ensuring that everything is in accordance with the regulatory entities and authorities, both domestic and international wherever required. In layman’s terms, a CFO oversees financial activities such as revenue generation, bookkeeping, protecting assets, and compliance with financial regulations. Today, the role of CFO has become broader and now with financial activities they need to be involved in strategic decisions, collaborate with different verticals within the company, give inputs in mergers and acquisitions, and more. What are the roles and responsibilities of a CFO? While all companies do not have the same requirements, broadly, as a CFO of a company, there are certain roles and responsibilities that need to be fulfilled. Some of those involve: \tOverseeing the financial activities of the company \tMeeting the revenue and earning goals \tEnsuring stable cash flow \tServing as a strategic advisor to the CEO \tAdvising various department heads on revenue maximization, revenue capacity, and expense control \tForecasting the company’s finances based on data In accordance with the CFO’s role these are the basic responsibilities: \tPreparing financial statements, business activity and forecast reports \tMonitoring financial activities to ensure that they are in accordance with legal requirements \tSupervising and reviewing financial reporting and budgeting processes \tFinding cost-reduction opportunities \tAnalyzing market trends for profit maximization \tFinding expansion opportunities \tSupporting other departments with financial inputs and suggestions What is the salary of a CFO? A CFO is one of the top executives of a company and therefore considering their work CFOs are paid well but it does differ based on the industry of a company. According to Indeed, the average salary for a chief financial officer is $124,571 per year in the United States. The research also shows high salary satisfaction - 79% of CFOs in the US say that their salaries are enough for the cost of living in their area. It should also be noted that a CFO’s salary varies depending on the state you are working in. The average salary in New York is much higher than the country’s average salary while the average salary in New Mexico is on the lower end. What are the basic qualifications of a CFO? The duties of a CFO have expanded over time but there is definitely a basic requirement that begins with choosing the right degree. The basic qualifications of a CFO include a bachelor’s degree in finance or economics and professional certification such as CPA or CMA. Doing an MSF (Master of Science in Finance) is extremely beneficial. Or you could possibly also choose an MBA with a specialization in accounting or finance. If you choose to get a master’s degree, here are three top choices for a master of science in finance; \tGWSB MS in Finance, which is a Master of Science in Finance from the George Washington University School of Business \tGWSB MS in Applied Finance, which is a Master of Science in Applied Finance from the George Washington University School of Business \tGlobal MS in Finance, which is a Global Master of Science in Finance from the Richard DeVos Graduate School of Management at Northwood University Key skills a CFO needs There are certain skills that a modern CFO should have, these can be broken down into 4 categories: \tLeadership and management skills: As a CFO, you will be having a team of people working under you, making leadership and management skills indispensable. \tAccounting skills: A CFO should have expertise in accounting and finance as they will be working mostly in that vertical. \tData skills: As a CFO, one of your major tasks is forecasting based on the data collected over the years. Analyzing the financial data of previous years and giving useful information necessary for a company's progress is crucial. \tStrategy skills: While working with finances and accounting, a CFO should also be able to help in strategic planning to align business and financial goals. This also helps in the adaptability of revenue streams and tackling market changes. Career path to becoming a CFO The CFO’s position is one of the higher-ranking positions in a company, hence it is important to have a certain kind of experience before this role. A person looking to apply for a CFO’s role should have a minimum of 10 years of experience in accounting and finance with a minimum of 5 years of those in team management as well. There is no fast track to becoming a CFO. The person in that position impacts the overall workings of the company and each step you take in your overall career will help you become a successful CFO. Looking at the versatile and holistic role of the CFO, a lot of companies ensure having a CFO on board to ensure profitability and financial backing for their company goals. FAQs \t \tWhat is the best career path to become CFO? There are certain definite prerequisites to becoming a CFO. These can be broken down to the following steps; Step 1: Get your bachelor’s degree in the relevant field Ensure that you choose your bachelor’s degree field keeping in mind your long term goal i.e. becoming a CFO. A degree in finance or economics will go a long way. Step 2: Get your masters degree A person in the role of CFO should be technically sound and updated about the changing rules and regulations at the same time should have business acumen. A master’s degree helps to gain in-depth knowledge in the relevant field. You can choose between an MSF, MSAF or MBA. Step 3: Get the right experience In today’s corporate world, hands-on experience goes a long way. At least 10 years of experience in the accounting or finance field with some years in team management will be the right direction to take. \t \tHow long does it take to become a chief financial officer? The average age of CFOs in top companies is 50 years and above but if you take the right steps at the right time you can become a CFO in your 30s. Belinda Hogan became the CFO of Neobank 86 400 at the young age of 28. \t \tCan a CFA become a CFO? Holding the designation of CFA (Chartered Financial Analyst) is definitely advantageous to become a CFO. Although being a CFA does not guarantee that you will definitely land a CFO’s position. \t \tDo you need an MBA to be a CFO? Having an MBA in finance or economics specialization helps but a person with a MSF or MSAF with relevant experience can also become a CFO. An MBA is in no way a prerequisite to becoming a CFO. \t \tAre CFOs in demand? Since the pandemic there has been a significant rise in demand for finance executives. The turnover of CFOs at companies in the S&P 500 rose to 18% in 2021, up from 15% in 2020 and 14% in 2019, according to Russell Reynolds Associates, an executive search firm.