• Brian Meadows

The Path to the CFO- What are good roles to take along the way?

The Path to the CFO- What are good roles to take along the way?

If you are thinking about eventually becoming a CFO, you’re probably wondering what the best career paths are. You might also be thinking about the areas that you might not have as much exposure to that you will want to understand once you’re responsible for overseeing. We hope this post will help you think about those areas and some options to consider along the way.

First and foremost, the CPA. We get this question all the time even from current CFO’s. Is it bad that I don’t have my CPA? Not at all. Not to discount the importance of accounting and accounting principles, but a CFO’s job is to hire the best team possible to run an efficient accounting and finance organization. If you’re a CFO and you don’t have your CPA, you’ll want to consider having a Controller on your team who does. Your Controller can bridge that gap for you and work closely with your auditors to give you the comfort of following GAAP. That said, your CPA never hurts but out of every CFO search we’ve every conducted, we’ve never had anyone not selected because they don’t have their CPA. Especially in today’s environment where many CFO’s are rising from FP&A, corporate development and investment banking.

Here are some areas to think about taking positions in as you climb through your career along with some reasons why they are important.

1. FP&A- This one is huge. Companies today are heavily driven by data and if you aren’t hearing requests to introduce more analytics, KPI’s, dashboards and the like in your current company, it’s likely you will be. CFO’s that come from an FP&A background have the ability to come into their roles and provide a lot of comfort to stakeholders, investors and the Board because they’re accustomed to running forecasts, modeling, proforma’s etc… This also allows them to balance the look back aspects of accounting with the forward looking strategy of finance. If you have an opportunity to participate on FP&A tasks, grab them.

2. Corporate Development- this area is almost as significant as FP&A. We constantly see accounting professionals who fast track their career having gone through the transaction advisory practices of the public accounting firms. Many companies may not have a team or role dedicated to this, but if you can get buy side M&A exposure, it’s a very attractive skillset to have both in private equity backed companies and for publicly traded companies. Knowing what happens in diligence, sell side activities, integration, multiples etc, really helps you excel as a finance leader or CFO.

3. Treasury- This is another important aspect for any CFO. Learning about lines of credit, different debt structures, syndicated debt, revolvers and all things banking are critical for an up-and-coming CFO. Understanding the different lending environments and financing options for a company is what help’s the most successful finance leaders out there. Again, treasury may already be incorporated into your role is some aspects but to get more exposure with the banking and debt sides, it’s good to ask your CFO if you can participate there. You can also start building relationships in the commercial banking community to learn the different methods available. Private equity firms are often the most sophisticated when it comes to banking so they’re another great resource to learn the ins and outs.

4. Controller- I’ve seen a lot of finance and FP&A focused finance professionals step into the Controller role throughout their career and it’s an incredibly smart move. Why? They want to understand the accounting lifecycle, the monthly close process, the ERP, the auditors so they can speak to those areas as a CFO. Being a Controller gives you a great look into everything the company does from a financial perspective and in many ways the role is broad. That allows you to get involved in implementations, banking, strategy, budgeting, managing investments and M&A and integration. If you’re on the finance side and you haven’t been a Controller, it’s never a bad idea to consider spending a year or two in that role. You’ll become more well rounded and you’ll be better equipped to manage the accounting process as a CFO.

There are a lot of other paths that might help you along the way including investment banking, business systems, and there is no one set path. We hope this gives you some ideas on the various areas to consider or to get additional exposure to as you think about your career progression. As always if we can ever help, we’re here.

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