Are you ready to leap one of the most crucial roles in the boardroom? Even though CEO and chairman are calling the shots, CFO remains an essential person in the organizational hierarchy. CFOs throws light on the company’s profitability and financial standing, demonstrating the company’s monetary value. They also manage cashflows, recruit managers, and work with internal and external parties that affect their bottom line. All in all, they have a lot on their plate.
So, if you aspire to become a CFO, you will need more than top-notch financial skills and an MBA degree. It is a fast-paced and forward-thinking role that would challenge you every day. Thus, it requires long-haul commitment and careful planning.
Even though the exact duties of the CFO depend on the scale of the company, there is a fairly consistent way to earn the CFO title. Besides an MBA degree, you have to get a few finance-related certifications. In addition, develop leadership skills and gain industry experience to become a master of your field. If you want to learn more about this, have a look below. Here are five tips that will help you become a CFO.
- Further your education
Previously, CFOs rose from the accounts departments, but that doesn’t happen anymore. The job role of CFO focuses exclusively on financial matters and planning; thus, you have to be a finance expert to take up this job role. For that, open yourself to lifelong learning. Besides your specialized bachelor’s and master’s degrees, earn a few certifications.
Perhaps, you can opt for Certified Public Account or Chartered Financial Analyst certification. You can find the study material and professional exam review papers online. Likewise, business schools can help you learn about strategy and operations. These key skills allow executives to collaborate with other business units such as human resources, information technology, etc. Remember, there are many roads to becoming a CFO today. You have to pick one that best suits your interests and the organization’s demands.
- Gain industrial experience
Have you worked in banking or credit unions? Having limited industrial experience isn’t enough to become a CFO. As finance is a crucial component of every business, you can gain experience from different industries. It will allow you to develop specialized knowledge about a chosen vertical. In addition, it will make you familiar with industry-related laws, taxation, budgeting process, and much more. Hence, ensure you have relevant industry experience before calling the shots.
If the company operates in a highly regulated environment, ensure you have experience working in regulatory compliance. Your expertise and knowledge of the subject matter will make you the best possible candidate for the job role.
- Learn technical skills
A big part of the CFO’s job is to ensure the organization’s decisions are financially secure. In other words, a CFO has to be the master of budgeting, compliance, analysis, and all accounting standards. You might have heard of all these terms in college, but as a CFO, you have to apply them in the practical world. To ensure you are ready for this role, learn these few technical skills.
- Accounting skills: CFOs must demonstrate technical expertise in financial topics and accounting standards. Thus, you have to have a strong understanding of subjects that have a tangible impact on the corporate world. That would include derivatives, time value of money, etc.
- Data skills: As CFOs handle business and financial analytics, you should be well-acquainted with Artificial Intelligence (AI) models. You should know how to use AI to make data-driven decisions, working in the company’s best interests.
- Budgeting & analysis: Even though finance managers prepare financial statements and budgets, the CFO has to review them. You have to find discrepancies in the subject matter and ensure it is free from errors.
Moreover, you must master crucial financial concepts, such as maximizing profits without increasing the risk exposure. Similarly, you should know how to manage investment portfolios and conduct audits. Having an in-depth understanding of these critical tasks will allow you to stay on top of all financial matters.
- Brush up on leadership skills
In addition to being finance gurus, CFOs must be competent leaders to head their organization’s finance and accounting department. They have to set a strong tone for the upper management to have a say in company matters. So, can you lead in the boardroom while guiding the fellow executives and board members? As a CFO, you will be leading most of the annual general meetings; therefore, you must develop stellar leadership and communication skills.
Perhaps, you can give presentations to audiences inside and outside your organization. If the team has to discuss the annual report, volunteer to explain the details. It will fine-tune your leadership skills, helping you learn the ropes. Most importantly, you have to lead by setting an example. Instead of delegating tasks, show employees how things are done and become their role models.
- Stay abreast of internal & external developments
In the coming years, the role of CEO will continue to evolve. It will overlap with HR, operations, IT, and many more departments. CFOs have to adapt and stay up to date with all organizational development to keep up with the pace of change. You can brush up on your computing skills and digital literacy. After all, automation is the future of the business world.
Besides internal familiarity, CFO is an essential player in maintaining the company’s positive image. Thus, you should have some understanding of public relations and crisis management. It will allow you to have allies outside the finance department.
Furthermore, explore cross-training programs and job-shadowing arrangements to see what’s happening in the organization. These programs will be productive for employees as well, allowing them to engage with colleagues from fellow departments. And as a CFO, you can lead interdepartmental committees and join companywide projects. Knowing the ins and outs of the organization will give you an edge while devising financial strategies.
Stepping into an executive role like a CFO is nothing less than a dream come true, but does it happen that easily? Of course, not. Besides years of experience and education, becoming a CFO demands a lot of commitment. You have to be a master of your field but familiar with all other job roles and departments. It requires individuals to have vast industrial knowledge so they can lead the company in the right direction, especially in terms of finances.