How Long Does It Take To Become A CFO? A Step-by-Step Guide to Becoming a Chief Financial Officer
So you’ve made the decision to take your career to the next level—you’re ready to become a CFO. Congratulations! You’re about to embark on one of the most lucrative and prestigious positions in the business world.
This guide will provide you with step-by-step instructions on how to become a chief financial officer. We’ll highlight what it takes to enter the profession and how to secure a competitive edge along the way. We’ll also consider other important financial considerations that every CFO should understand.
What does the CFO do?
A Chief Financial Officer (CFO) is a high-level executive who holds great responsibility within an organization or company. CFOs are responsible for overseeing the finances and accounting of their company, as well as keeping track of long-term financial goals and strategies. They must ensure compliance with laws and regulations and advise on the most beneficial economic plans. As the top financial executive, CFOs are typically invaluable members of the management team.
The duties of a CFO are far-reaching and varied, though they are naturally heavily focused on financial matters. They should have an in-depth knowledge of financial terms, financial forecasting, implementing budgets, and controlling cost containment. As such, CFOs are expected to know about investments, taxes, accounting principles, financing principles, auditing practices, various capital markets instruments, banking relationships, and more.
Responsibilities of being a CFO
As a CFO, your primary responsibility is to manage the financial health of a company. This includes overseeing financial operations, developing and monitoring long-term budgets and goals, creating ways to maximize profits, and ensuring compliance with all applicable laws and regulations.
Additionally, chief financial officers often act as advisors to the board of directors or upper management, providing insight into business decisions based on their expertise in financial matters.
While there are great rewards to a successful career in finance, becoming a CFO comes with great responsibilities that need to be taken seriously. It is vital for organizations to have chief financial officers who are both capable and thoughtful when it comes to making major decisions regarding the future of a business. With this in mind, let’s take a closer look at some of the qualifications necessary for achieving the position of CFO.
- According to the Bureau of Labor Statistics, the median salary for Chief Financial Officers (CFOs) in 2019 was approximately $134,000.
- According to the Robert Half 2018 Salary Guide, it usually takes 8–10 years for an accountant or financial analyst to climb the ladder and become a CFO.
- According to a 2018 survey by Robert Half, almost 70% of CFOs hold an MBA or Master’s degree in finance or accounting.
Qualifications for the CFO position
The qualifications for the CFO position are similarly rigorous and complex. On the one hand, many organizations seek a high level of subject-matter expertise and experience in all aspects of finance, accounting, taxation, risk management, and financial strategy. This would come from having several years of experience in a senior or executive financial management role. Similar to the educational requirement, most organizations generally favor an advanced degree like an MBA or Master’s in Finance.
In order to become a successful CFO in today’s business climate, you must possess a balanced mix of both soft and hard skills. This combination is vital in order to achieve maximum effectiveness within any given organization.
Having a good understanding of these qualifications will help put perspective on the next necessary step: gaining the proper education and experience needed to become a chief financial officer.
Education and experience requirements
The education and experience requirements for becoming a Chief Financial Officer (CFO) are fairly straightforward. An aspiring CFO needs to have broad education and experience in business management and finance, including a degree in the field of economics or business, to have a competitive edge. Other than the traditional route, however, many innovative paths now exist to help individuals acquire the necessary qualifications in order to become a CFO.
The qualifications needed for becoming a successful CFO have greatly evolved over time, yet one thing remains true: having both an exceptional educational and professional background helps bring together the required skillsets needed to move forward towards this goal. With the right mix of ambition, focus, and capability, anyone can take on this role if they are willing to dedicate time towards furthering and polishing their skillset specific to this area.
How Long Does It Take to Become a CFO?
The journey to becoming a CFO comes with its own set of complexities, from satisfying education and experience requirements to navigating a successful career track. Central to this endeavor is the amount of time it takes to become a CFO. While there is no one-size-fits-all answer, many agree that several years of senior managerial experience and a strong financial background are necessary before approaching a CFO role.
Ultimately, while there is no clear-cut timeline indicating how long it takes before someone becomes a CFO, having the right combination of education and experience is key. With that in mind, having knowledge of one’s desired industry along with other soft skills such as communication are also critical components for success in the role. With these elements in hand, you can now embark on the next phase of your journey towards becoming a CFO: carving out an effective track for advancement within your company or organization.
Track to the CFO position
The track to the CFO position differs between each business, making it impossible to provide an exact timeline for when you can expect to reach the top spot. Generally speaking, most people have a road map of 4–7 years before they become a CFO, and some may even get there quicker with the right qualifications, experience, and opportunity.
There is no one-size-fits-all path that leads to becoming a CFO. Some businesses value experience in particular departments, such as accounting or finance, while other companies prefer someone with broader management capabilities. Depending on which route you take, it could take a long time to become a chief financial officer or relatively little time. You should weigh your options and decide whether expanding your knowledge or sticking with one area of expertise is better for your career goals and the company you work for.
Working towards your goal
Now that you’ve made a plan for becoming a CFO, it’s time to start working towards your goal. If you’re in school, you may want to consider enrolling in accounting classes and acquiring any necessary certifications or degrees. Additionally, internships can give you the practical experience and career contacts needed to get your foot in the door. You can also take on special projects or extra assignments at your current job if they are available, so as to show initiative and dedication to enhancing your professional skills.
For those who are already employed and are looking for advancement, gaining knowledge of the latest technology and strategies relating to finance is essential. Research trends in your field that CEOs and other top-level executives must understand; participate in webinars to stay up-to-date on industry standards; network with other professionals either online or at events; all of these activities will equip you with a systemic understanding of the business world as well as relationships with key players from which to draw advice when needed.
Having the right attitude is just as important as having the requisite skills. Employers want someone who continuously strives for more out of their career and takes ownership over their development within the organization. Now that you’ve taken steps towards becoming a chief financial officer, it’s time to build upon those successes by earning experience and networking effectively. Doing so will open up more doors for further growth and career opportunities that may bring you one step closer to fulfilling your goal when evaluating what type of job is best for you.
Earning Experience and Networking
As you work towards your goal of becoming a CFO, the next step is to gain experience and build your professional network. Balancing the combination of experience and networking is essential in order to reach your goal of becoming a CFO.
At the most basic level, the more experience you have and the larger your networking circle, the better your chances are of reaching your goal.
Those who claim that taking on experience should be a priority cite the fact that without actual professional skills under their belt, many high-level positions cannot be attained. Furthermore, it is often argued that taking on high-level responsibilities allows for a greater understanding of managerial communication and allows those interested in becoming a CFO to acquire higher-stakes tasks over time. For example, Joe Smith became a CFO after working his way up through his finance department from being an accountant, demonstrating that building expertise and gaining experience help prepare one for this role.
Are you dreaming of becoming a CFO and want to know how long it takes to achieve this career milestone? Look no further than CFO Strategies, your trusted partner in financial management. Our experienced team understands the path to becoming a CFO and can provide you with guidance and support along the way.
Contact us today at (855) 732-7861 to schedule a consultation with our knowledgeable professionals. During the consultation, we will discuss the typical career trajectory and the steps involved in becoming a CFO. We’ll provide insights into the educational requirements, professional experience, and additional qualifications that can expedite your journey towards this esteemed position.