A chief financial officer, or CFO, is a great role to aspire to for anyone who works in finance. It’s one of the elite positions in any company, and usually commands a large salary.
So what is a CFO, and what is the path to becoming one?
What does a CFO do?
A CFO is responsible for the financial planning and record keeping of a company, as well as managing financial risk.
They report to the company’s higher management - usually the Chief Executive Officer (CEO), plus board members. The CFO is one of the highest positions in large companies.
Generally, 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.
Responsibilities of a CFO may include:
- Managing the financial actions of a company
- Tracking cash flow
- Financial Planning
- Analysing the company’s financial strengths and weaknesses
- Proposing corrective actions where appropriate
- Ensuring that financial reports are accurate and completed in a timely manner
- Dealing with investors
- Devising a company’s strategic direction
- Making announcements on financial performance - both positive and negative
What does a CFO earn?
Depending on the size of the company, the salary can vary. However, you may expect to be earning over £100,000* a year, with some CFO salaries reaching up to £1million.
Large multinational companies hire outstanding financial experts as CFOs and offer very attractive salaries.
What qualifications and experience are needed to become a CFO?
It’ll probably come as no surprise to hear that you need a lot of experience to reach CFO level. It’s definitely not a role you can take on straight after school or university.
Most CFOs will have an educational background in finance, business, economics or management. A typical route would be to do a bachelors and masters degree in accounting or other finance-related studies, alongside a professional finance qualification, such as ACCA or CIMA.
While education and the relevant qualifications are all-important, the quality of your working experience and professional track record are the best tools for potential CFOs.
Most CFOs are recruited from within, so giving years of hard work and loyalty to one company can go a long way.
There used to be quite a rigid path for CFOs - going from accounts assistant to controller and treasurer, then on to CFO - but modern times call for modern CFOs.
There are opportunities to expand your experience in sales or operations into finance. The modern CFO needs a breadth of experience - they need to understand, and have experience, company-wide.
No matter what your background or education, the role of CFO is not one to take on lightly. Immensely rewarding, but the financial weight of a company is on your shoulders.
As a CFO you will hopefully have a very successful career at the top of the ladder, but a huge amount of responsibility and expectation would lie with you.
Ready to boost your career potential?
If CFO is your dream role, you’ll need to make sure you have the right qualifications. Check out our ACCA, CIMA or Banking and Finance qualifications for more information and insight into what is needed to be successful in finance.