Short for Chief Financial Officer, CFO is a title given to someone in charge of the finances of a business. No matter the size of the company, it is very important to properly maintain the out- and inflow of cash for a business, and the CFO is the one who approves and oversees the transactions. Sometimes, they may also manage payroll, or the position may only be supervisory.
The primary goal of a reputable CFO is to guarantee that a business will profit from its actions and will also be savvy with the money it has to work with. It is necessary to understand obligations with tax and to monitor expenses that cannot be avoided. This often requires being very keen-eyed with records and bookkeeping.
Depending on the practices and size of the company, the CFO might also have a role with allocating the budget. Sometimes, these are handled by day or by the accounting department, which will prepare a summary and a thorough report to be read over by the CFO for approval to spend. This person is responsible for reviewing these reports and either marking it as approved or rejected.
Place in the Company
The title given to a CFO is most prestigious when applied to a position within a major corporation. As with any kind of officer, all companies often have just one CFO, regardless of the number of offices it houses or how large the company is. Typically, these finance officers are extremely busy, especially within a worldwide conglomerate, but the position is very well paid, making it a very lucrative position.
In a small company, a CFO is more likely to be hands-on with the lower-level accountants to help save money. With young businesses, it is common to minimize staff by giving more responsibilities to those who are hired in the company. In fact, the CFO might be the only financial expert at all.
Becoming a CFO
As one might imagine, becoming a CFO is something that requires a considerable amount of experience within the business industry, in addition to training in both financial matters and finance as a whole. It is almost always required to have a college degree, and corporate CFOs often have advanced certifications like business degrees or certifications as accountants.
Those interested in becoming a CFO must build worth through experience, education and reputation. CFOs almost always have a handful of experience and advanced degrees due to the difficulty in responsibilities for the officer. After all, not only does the CFO need to evaluate financial risks, maintain the financial health of a corporation and ensure the taxes are paid properly, he may also need to manage information systems and work with human resources.
At the minimum, a four year degree is normally required; master degrees are popular as well. School work that shows drive is also beneficial due to the leadership required as a CFO, and social leadership is also important. Students can accomplish this through fundraising projects or through leading a club.
The experience required can vary; many start in accounting while others start in sales. Either way, it is required to have management experience to help sharpen leadership skills and prove that the prospective chief financial officer has what it takes to get the job done.