Increasingly, companies of all sizes and capacities no longer rely on the sole direction of chief executive officers (CEOs) with operations. More businesses compartmentalize top-level management across different specialties, such as marketing and technology. One of the most crucial executive positions is the chief financial officer (CFO). Fairfax University of America in Virginia offers business administration degrees at its Virginia campus near Washington, D.C. Learn how a business administration degree can lead to a career as a chief financial officer.
CFOs are senior executives who supervise all financial activity at a business. They regularly collaborate with CEOs and other chief executives to develop goals for the organization, offering financial input when necessary. Like controllers and treasurers, CFOs supervise the accounting and other finance departments to gain a firm understanding of the fiscal state of their company.
Since CFOs are essentially the head of the financial department, their responsibilities are numerous and complex. While not all positions will involve the same tasks, common duties for CFOs include:
Naturally, being a financial executive entails drafting budgets for the company. CFOs will communicate with other departments to figure out how much capital they need to perform tasks and meet with banking and insurance partners to establish plans. Additionally, these executives ensure customers make payments on time and in full to provide the business with enough money to meet financial requirements.
CFOs must gather past and current financial data to formulate the most effective solutions for their organizations. They also perform financial forecasts by looking at external and internal elements that may affect the company in the future, such as labor and material costs, changes in market demand, and technological developments. To better understand external factors, CFOs may leverage data from analyst firms, government agencies, trade and association membership, and media organizations.
A significant part of the CFO’s job is to decide if new initiatives will deliver a worthwhile return on investment (ROI) for the company. They may examine cash flow and assess the organizations’ financial strengths and weaknesses before approving a project or investment, or research new acquisitions before making a decision.
Along the same vein, they observe financial activity across all the departments to find areas for improvement and offer solutions to maximize revenue. This task requires shrewd attention to detail, as CFOs must maintain costs without tarnishing the organization’s reputation or decreasing customer and employee fulfillment.
CFOs oversee all vital financial documents, including balance sheets, cash flow statements, and profit and loss (P&L) reports. While they may not write the documents themselves, these executives verify that all included information is accurate and complies with generally accepted accounting principles (GAAP).
Financial professionals would be hard-pressed to find a higher position in their field than the CFO. These roles tend to be quite rewarding, as well. According to the U.S. Bureau of Labor Statistics, the median annual salary for chief executives in May 2021 was $179,520, and the average yearly wages for financial managers in the same year was $131,710. However, CFOs who want more influence in their companies may advance their careers and become CEOs.
The key to transitioning from CFO to CEO is sharpening social leadership skills, such as innovation, strong communication, and optimism. By and large, CFOs share the same level of left-brain technical skills required to be CEOs but may need to focus on these right-brain leadership proficiencies to boost their careers.
Students who wish to pursue a career as a CFO should consider enrolling in one of the business administration degree programs at Fairfax University of America. Our B.S. in Business Administration (BSBA) is ideal for students just starting their educational journey, and our Master of Business Administration (MBA) is best suited for those with a bachelor’s degree in the topic or a related field.
These programs equip students with many of the skills necessary to become CFOs later in their careers. Students earning one of these business administration degrees obtain the following competencies that enable them to perform executive financial tasks:
At Fairfax University of America, our goal is to help students experience personal and professional growth and become transformative leaders in an increasingly multifaceted, global society. When you enroll in one of our programs in Virginia, you receive an affordable, business-focused education from esteemed instructors. You also will interact with students from diverse cultural backgrounds at our Washington, D.C., area campus.