The financial management position of a CFO/CFOO (chief financial officer, or chief financial operating officer) is definitely one of the more complicated corporate finance careers today — not only because of the responsibilities and qualifications that are naturally required in executive financial jobs, but also because the average CFO job description seems to be changing faster than nearly every other type of corporate job. Nevertheless, here are a few basic points about CFOs and why businesses need them:
- The standard definition of a CFO is someone who manages a company’s finances, and any employees who handle financial tasks, while also communicating with other company executives, board members, and investors. In addition to keeping records of a company’s finances, the CFO is usually expected to make predictions about the risks involved in major financial decisions.
- Most businesses don’t start out with CFOs; a CFO position is usually added after a business grows substantially and the CEO can no longer handle basic company management tasks in addition to the company’s finances — or when it becomes more expensive to outsource these financial tasks than it would be to hire financial analysts and accountants. In general, a company that deals with investors or makes investments itself is going to have a CFO.
- Typical CFOs have quite a bit of experience in the industry and will have been planning their corporate finance careers since college. Although it’s not necessarily required, most CFOs are Certified Public Accountants (simply because they begin their careers as accountants). Additionally, many CFOs have advanced university degrees and corporate management training.
- Because the CFO position requires so much education and experience is required, the average salary for a CFO is pretty high — whereas the average financial analyst in Canada earns about $55,000 per year, it’s common for corporate executives to make six-figure salaries.
Although most people begin their corporate finance careers as accountants or financial analysts, most people are interested in the industry because of job stability — as long as there are businesses that need to deal with numbers, there has to be number-oriented people to record and analyze those numbers, and there also has to be an executive manager in charge. This is exactly where a CFO comes into play!