Money is the spark that keeps the world’s $77.7 billion economy burning with hot expansion and acquisition opportunities. Being financially stable is crucial for organizations seeking a global edge over competition. Therefore, companies appoint a Chief Financial Officer (CFO) to oversee the direction of their fiscal functions. CFOs are executive-level officials who have the highest responsibility in planning, developing, organizing, and evaluating corporate finance performance. They serve as the financial gurus on the corporate Board of Directors to ensure monetary goals are being exceeded. Chief Financial Officers are held accountable for whether the company’s financial reports follow regulations from the Securities and Exchange Commission (SEC). Whether the company employs 100 or 100,000, the CFO must make critical decisions daily to protect organizational health and avoid cash shortages.
Salary
The U.S. Department of Labor reports that the 238,940 chief executives nationwide bring home a mean annual wage of $185,850, which equates to a whopping $89.35 per hour. The Robert Half Accounting & Finance Salary Guide further breaks down the CFO’s salary based on organizational revenue. Chief Financial Officers in corporations worth under $50 million earn $109,750 to $157,750, but those at companies valued at $500+ million earn up to $484,500.
Beginning Salary
Climbing the corporate finance ladder typically begins with entry-level financial analyst jobs that average $61,500 to $82,500 per year. More experienced financial reporting managers are compensated with salaries from $92,250 to $116,500 annually. Income potential is virtually limitless once CFOs reach the helm. The highest-paid Chief Financial Officer, Anthony Noto, collected $72 million in 2014 according to Business Insider.
Key Responsibilities
Chief Financial Officers hold many responsibilities in formulating the company’s tactical direction to improve revenue and economic growth. CFOs double check that accurate financial data is reported to executives, shareholders, investors, and regulatory boards. They’ll oversee the corporate capital structure to limit risks while rising profits and choosing smart investments. CFOs must spearhead reliable financial control systems for any subsidiary or foreign operations. They maintain close relations with auditing committees to handle any legal issues involving corporate finances. Other important duties include investing pension funds, forecasting expenditures, negotiating acquisitions, supervising transaction processing, selecting employee benefit plans, optimizing taxes, and coordinating investor relations.
Necessary Skills
Success as a Chief Financial Officer will depend a variety of executive leadership skills. CFOs must have outstanding analytical ability to review the corporate dollar signs and implement an effective financial strategy. Management skills are essential because CFOs coordinate the work of countless finance professionals, including tax managers, accountants, auditors, and controllers. Technical skills are a must since today’s Chief Financial Officers depend on software like Excel and QuickBooks. CFOs should be strong communicators to concisely present financial reports in a meaningful manner. International corporations prefer CFOs who are multilingual with good cultural awareness. Chief Financial Officers should also lead with risk management, collaboration, organizational, and negotiation skills.
Degree and Education Requirements
Becoming a good candidate for CFO positions requires mastering the ABCs of corporate finance, which requires considerably more education than a high school diploma. Holding an accredited bachelor’s degree is the bare minimum for Chief Financial Officers. Undergraduate majors in finance, accounting, economics, and business make the most sense. Education gained from top-tier, AACSB-accredited business schools is usually preferred. Earning an advanced degree will broaden your opportunity for becoming a Chief Financial Officer. The Master of Science in Finance (MSF) and MBA in Finance are two popular options. Some fulfill the 150-hour CPA requirement by pursuing a Master of Science in Accounting (MSA).
Rewards and Challenges of the Position
College finance majors across the United States are dreaming of entering the C-Suite, but landing the CFO title comes with advantages and headaches. On the sunny side, CFOs are the most superior financial managers with great autonomy to strategize the company’s direction. Chief Financial Officers collect lucrative salaries that come with big bonuses, investments, and sometimes company cars. CFOs have flexibility to manage the cash flow of multi-industry entities in the public, private, or nonprofit sector. Becoming the CFO means you’ll essentially become your own boss and only report to the Chief Executive Officer. However, getting hired as the CFO isn’t easy, especially at large Fortune 500 companies. Investing significantly in education, experience, and certification is important to beat competition. Chief Financial Officers deal with monstrous pressure to keep the company profitable, even in economic downturns. CFOs work long hours beyond the 40-hour week to ensure today’s complex regulations are met.
Getting Started
Plenty of work experience is requisite for getting your foot into the corporate finance door. Young finance graduates should have already completed an internship or cooperative for resume boosts already. Upon graduation, you’ll begin applying for entry- to mid-level finance positions. Don’t be afraid to begin your CFO quest as an accountant, securities analyst, fund manager, or risk analyst. Many businesses offer formal management training that you could capitalize upon for advancement. Employer tuition assistance could also help you afford returning for a master’s. CFOs generally have at least 10 years of experience before being called into executive leadership. Certain professional certifications could ease the way. Many Chief Financial Officers pursue the Certified Public Accountant (CPA) credential. Investment professionals benefit the most from becoming Chartered Financial Analysts (CFAs). Becoming a Certified Management Accountant (CMA) can also help.
Future Outlook
Financial management jobs will always be necessary to assist organizations in directing their money matters and investments. Today’s companies are seeing more revenue on their ledgers because the economy has recovered from crisis. However, U.S. economic growth for 2016 is nearly stagnant at only 1.2 percent. Even though America has over 30 million businesses, competition for the top executive role of Chief Financial Officer is brutal. Employment of financial managers is only projected to rise by 7 percent through 2024. Most of the added 37,700 new jobs sadly won’t be for CFOs. Candidates with a master’s degree and certification could scrounge up positions from retiring executives though. Leading employers include private corporations, investing brokerages, manufacturing firms, and computer systems design.
Overall, the CFO is an analytical wizard who holds the power to direct corporate ventures for maximizing profits while reducing risks and expenditures. Chief Financial Officers look at the big picture to draft strategic plans that boost the company’s position in the global market. Taking yourself to the top as Chief Financial Officer (CFO) will provide lucrative rewards for forecasting the organization’s healthy fiscal future.
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