Finance majors often have dreams of hiking up the corporate ladder and claiming the coveted role of Chief Financial Officer. For most companies, CFO is the third highest rank attainable after Chief Operating Officer and Chief Executive Officer. It’s the most senior position available for finance professionals to drive strategic business decisions. CFOs are given the power to direct the company’s financial transactions for raising capital and ensuring expansion while controlling risks. Chief Financial Officers report the monetary facts and figures to guide the executive team to smart corporate investments. A day in the life of a CFO is demanding, but the median yearly salary of $121,942 can make it worth it. Follow these four steps to build the financial expertise and credentials required for CFOs.
1. Earn an Undergraduate Degree
Access into the financial world requires holding at least a bachelor’s degree from an accredited, four-year college. Most aspiring CFOs attend top-tier business schools to major in finance, accounting, business administration, or economics. Universities approved by the Association to Advance Collegiate Schools of Business (AACSB) will look the most impressive on a resume. Pursue courses, such as corporate finance, risk management, compliance, financial reporting, and venture capital, that align with CFO duties. Completing an internship is advised to get your foot into entry-level finance jobs.
2. Attend Graduate School
Whether you go immediately after graduation or spend several years working first, graduate school is a must for today’s CFOs. The majority of Chief Financial Officers hold a Master of Business Administration (MBA) from AACSB-accredited schools. It’s also fitting to pursue a Master of Science in Finance (MSF) or Master of Accounting (MAcc). If you’re experienced, many leading universities will offer executive formats with evening or online courses. Having at least 150 credits in higher education is key for following the next step.
3. Pursue Certification
Earning the Certified Public Accountant (CPA) designation isn’t required, but it’s an excellent start for aspiring CFOs. Many Chief Financial Officers are CPAs to attest their competency in reporting and reviewing financial transactions. Federal law requires professionals filing SEC reports to become licensed CPAs. Doing so will require holding a master’s degree, knowing GAAP principles thoroughly, and passing a four-part exam from the AICPA. Another alternative is becoming a Chartered Financial Analyst (CFA). This challenging credential requires four years of finance experience and three passing exam scores.
4. Gain Finance Experience
On average, CFOs possess 15 years of field experience before being promoted. That means you’ll spend considerable time learning organizational finance policies firsthand. You’ll likely enter as an accountant, financial analyst, budget analyst, securities agent, or auditor. Some companies offer management training programs that you should capitalize on. After a few years, you can begin applying for mid-level jobs like risk manager or financial manager. Most future CFOs will eventually act as treasurer or controller to improve their strategy execution.
Keep in mind that taking these steps won’t automatically ascend you to the C-suite. There’s tremendous competition for this ultimate financial title. The Bureau of Labor Statistics reports that employment of top executives, including CFOs, will only increase by 6 percent through 2024. Becoming a CFO will require advanced management training, but that’s only the tip of the iceberg. For success as Chief Financial Officer, you’ll need flawless financial decision-making, analytical, leadership, problem-solving, and collaboration skills.
