CFO Recruiting: Two Paths to CFO
A chief financial officer (CFO) is among the key members of the C-suite. They play a vital role in overseeing a business’s financial activities. They’re closely involved in budgeting and financial reporting and always seek opportunities to maximize profits and reduce costs.
CFOs are mainly involved in strategic planning, which includes collaboration with other key stakeholders in the business. The scope of duties may vary depending on the industry and the company itself, but a CFO typically serves a management function, helping to devise business goals and tracking key performance indicators.
Since the CFO has complete oversight of a company’s financial operations, they must have a background in accounting or any other finance-related field. However, number-crunching is not the only requirement for this highly coveted position. A great CFO has experience, leadership, and communication skills. The CFO spends much time in the boardroom, meeting with investors and board members. These interactions require skills in presentation and public speaking.
A great CFO must have a thorough understanding of accounting and business operations, which is why the two main career paths for CFOs are accounting and finance.
CFO Recruiting: The Accounting Path
Becoming a certified public accountant (CPA) is the most common path to becoming a CFO. In fact, 45% of CFOs are CPAs. This is unsurprising, considering the job description of a CFO requires extensive accounting and financial knowledge. Working for a couple of years as an accountant helps build the groundwork needed to understand the functioning of business financials.
Completing a Master of Business Administration (MBA) takes one closer to becoming a CFO from a junior accountant. Earning this graduate degree takes two years. While it’s not a requirement for the job, it provides excellent education and gives one a competitive advantage. It’s advisable to work first as an accountant and then go back to graduate school for an MBA.
Working for one of the Big Four accounting firms is a great way to propel one’s career in finance. The four companies, PricewaterhouseCoopers, Deloitte, Ernst & Young, and KMPG, usually recruit from the best schools in the country, and they hire and train the best of the best. It takes quite a lot of work to get a job at one of these firms, so gaining entry sets one apart from the competition. Working at one of these firms for a couple of years exposes one to the highest business and finance levels and is an excellent way to fast-track one’s journey to becoming a CFO.
The next step in the process is to transition from public accounting to industry accounting. Here, the accountant puts a lot of effort into rising through the ranks to the position of senior accountant. It’s crucial to develop the essential managerial skills required for a C-suite position during this time. The role of a CFO involves supervising departmental activities and delegating responsibilities, so an aspiring CFO should always find ways to develop and demonstrate their leadership skills.
Senior accountants can then work on being promoted to controller. This position has a lot of duties that prepare one for the CFO position. Producing financial reports, maintaining an adequate system of accounting records, and coming up with a set of controls to mitigate risk help prepare one for the demanding role of CFO. From the controller, it is easy to be promoted to CFO. According to a study by Russell Reynolds, 69% of the CFOs within Fortune 100 companies were promoted internally.
CFO Recruiting: The Finance Path
While the accounting path is most common for CFOs, the finance path is equally effective. A junior financial analyst can be promoted to CFO in a series of steps. A CFO is essentially a money-savvy professional who has worked in general management roles to develop additional skills.
This path to becoming a CFO involves building a robust resume. CFO status takes years, if not decades, to achieve. It will take a considerable amount of experience and dedication to achieve the position. An ambitious financial analyst can spend time enhancing their business acumen and building their professional reputation, which will get them promoted to financial analyst and later senior financial analyst.
Developing specialized knowledge in their chosen field is a great advantage to a would-be CFO. Learning about budgeting processes, mobile banking, industry-related tax laws, international finance, regulations, and any other aspects of the business will help prepare for a CFO’s strategic role.
On the path to becoming a CFO, industry expertise is not enough. It is important to explore interdepartmental opportunities. A senior financial analyst eyeing the CFO position should familiarize themselves with how the entire company, and the business world in general, operates. This will help them get promoted to finance manager.
The role of a CFO continues to evolve, overlapping more and more with human resources, operations, and information technology. Finance managers should work on improving their cross-disciplinary perspectives and their digital literacy and computing skills. After a couple of years working as a finance manager, they may be promoted to oversee Financial Planning and Analysis (FP&A).
From this position, the natural next step is the CFO position. As overseer of FP&A, one gains skills and experience in planning and budgeting, performance reporting and management, integrated financial planning, and forecasting. Gaining skills in these areas equips a CFO to deliver the finance analytics used to inform business planning and strategic decision-making.
CFO Recruiting Firm
Education and other relevant qualifications, including certification in various areas are all important, but they do not make up for experience and leadership skills. So with a background in accounting or finance, all one needs to become a CFO is a professional track record of excellence and exposure to the business world, where robust skills in business strategy and planning have been gained.
At Ghost Mountain, we offer various recruiting options for accounting and finance senior staff, including CFO recruiting. Get in touch with us today to talk about your staffing needs and discuss any issues in your company that you’re trying to overcome.