Growth Trends for Related Jobs
Chief financial officers are top executives responsible for ensuring organizations achieve their financial goals and objectives. They assess the financial risks organizations face, develop suitable risk mitigation strategies, oversee tax planning and identify areas where the organization can reduce costs and maximize profitability. A significant amount of relevant work experience, at least a bachelor’s degree and the ability to lead are some of the qualifications for breaking into this job.
Earn the Degrees
The journey to becoming a CFO begins in undergraduate school, where you must earn a bachelor's degree in finance, accounting or business administration. Since CFOs typically land the job by working their way up through the ranks, the next step is to find an entry-level position in the accounting or finance department of an organization. You can begin as an accountant, financial analyst or business coordinator. While working, obtain the Certified Public Accountant designation, followed by a master’s degree in finance or business administration. These credentials can enable you to move into mid-level management, where you can strengthen your professional know-how and ready yourself for the CFO's job.
Master the Skills
It takes more than a mastery of accounting skills to be the CFO. You need to be a business strategist with strong problem-solving and corporate leadership skills. For example, you might need to find ways to reduce operating costs by lowering labor or production costs. You might also be asked to lead different departments such as accounting or budgeting. Strong planning, decision-making and teamwork skills are essential as well because the job involves helping formulate the company’s future financial direction and partnering with senior managers to make strategic decisions. Finally, you need strong relationship building skills to work effectively with senior managers, board members and other key stakeholders.
Obtain Additional Certifications
Although the CPA-MBA combination is typically sufficient to qualify you for employment as CFO, earning additional certifications improves your credibility. The Institute of Management Accountants awards the Certified Management Accountant credential to people who wish to demonstrate their financial management proficiency to potential employers. The program is open to IMA members who have at least a bachelor’s degree and at least two years of professional experience. Certification applicants must also pass a two-part written exam.
CFOs work for a range of different organizations, from large publicly traded corporations to small privately held firms, non-profit groups, government agencies, colleges and universities. All types of industries hire CFOs, though heavily regulated industries such as banking and finance have a particular need for skilled CFOs to help them wade through complex government rules. The U.S. Bureau of Labor Statistics projects that employment of top executives, CFOs included, will grow by 11 percent from 2012 through 2022, which matches the average expected growth rate of all occupations. According to a 2012 CFO compensation survey conducted by the American Institute of CPAs, the median annual salary for CFOs was $150,000 at privately held companies and $206,000 at publicly traded ones.
2016 Salary Information for Top Executives
Top executives earned a median annual salary of $109,140 in 2016, according to the U.S. Bureau of Labor Statistics. On the low end, top executives earned a 25th percentile salary of $70,800, meaning 75 percent earned more than this amount. The 75th percentile salary is $165,620, meaning 25 percent earn more. In 2016, 2,572,000 people were employed in the U.S. as top executives.
- U.S. Bureau of Labor Statistics: Top Executives
- Journal of Accountancy: What Does It Take to Become a CFO?
- Investopedia: What does a Chief Financial Officer (CFO) do?
- Accounting Tools: Chief Financial Officer (CFO) Job Description
- Institute of Management Accountants: How to Get Started
- American Institute of CPAs: CFO Compensation Survey
- U.S. Bureau of Labor Statistics: Occupational Outlook Handbook: Top Executives
- Career Trend: Top Executives
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