What does a CFO do and how can anyone become one?
In: Economics
A CFO operates as an executive department head of an accounting wing for a company, overseeing the managment of financial needs such as billing, pay for employees, and general stewardship of company coffers.
You can become a CFO by being hired as one, being promoted from an accounting managment or executive role, or working in a company that grows to sufficient size for your role title to be changed to the executive “CFO”
A Chief Financial Officer is the executive in a company responsible for all the financial aspects of the business. They are responsible for all the money, budget, ledger, reporting, taxes, billing, analysis, purchasing, etc. in the company. To do this they typically employ financial controllers, financial analysers, lawyers, etc. under them in one or more department. And they work closely with the rest of the company, especially sales and hr.
The CFO would receive reports and issue orders to the heads of the different financial departments and again report on a day to day basis to the CEO, and also directly to the board of directors. Because money is so important to the shareholders the CFO is reporting a lot to the board and the rest of the shareholders, usually equally much as the CEO and maybe even more. Other Chief Officers also report to the board but not as much. So in a board meeting you almost always have a presentation by the CEO and by the CFO but only occasionally from the COO, CTO, CCO, etc.
Technically anyone can become a CFO. It is a job like anyone else and you do see job listings for CFOs all the time. But often they would want a CFO with the right qualifications. Things like economics school, business school, law school and then longer relevant experience. But it is up to the CEO and usually the board of directors to chose which candidate to hire and they can ignore any qualifications you might have or lack thereof. This is more common in small companies as they might not have the money to pay the salary of a fully qualified CFO, and they might not need a full time CFO so the job would include other tasks that requires other qualifications.
Create an incorporated company by submitting the paperwork and money. On one of the forms there is a place to enter the name of the CFO. That’s one way to become one.
It stands for Chief Financial Officer and will usually report to the Chief Executive Officer. The CFO will usually have an accounting background so you would need to be an accountant. Over the years work up your corporate and accounting background.
I’m a CFO, the answer very much depends on the size of the organization. The smallest company could have a CFO that’s more like a bookkeeper. They track all accounting and pay expenses. As you get into bigger and bigger organizations their role becomes more of a manager of people who do these things. They are the ultimate decision maker on areas of finance, accounting, and other areas.
When you get to larger size entities they spend a lot of time strategizing with the rest of senior management. They might be raising cash for the organization by selling debt or equity one day and presenting the audited financial statements to the board the next day. There are many many roles and responsibilities that a CFO can perform.
Generally CFOs will have a degree in accounting or finance with 5-10+ years of progressive experience in those fields before becoming a CFO depending on the size of the entity.
It’s a really cool job in my opinion and I love it.
Most CFOs come with an accounting or finance background. The CFO is responsible for all the accounting in the company – ie keeps track of all the dollars, usually runs the tax strategy, handles regular internal and external audits, prepare financial reports and statements.
For a small private company, knowing the business, being detailed oriented and understanding money matters is usually sufficient. But for larger public companies, the CFO has to spend a lot of time with external experts like auditors, tax attorneys, investment relations/analysts, bankers, lawyers as well as the Board of Directors. For the US, every company must have a CEO and CFO registered with the registrar of companies. Those are the only two positions that MUST be filled in a company.
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