Preparing for a CFO Role

By John L. Daly
MBA, CPA, CMA, CPIM

HowdoesanaccountantbecomeaChiefFinancialOfficer(CFO)?Whilethereisno singleroutetoaCsuitejob,thisarticlewillprovideinsightsthatcould significantlyincreaseyourchancesofmakingtheleaptoCFO. AccordingtoanarticleinCFOmagazine1,majoringinaccountingorbecominga CPAhasnothistoricallybeenthebestroutetobecomingCFO.Thearticlereveals thatpriortotheSarbanesOxleyAct,only26%ofallFortune1000CFOswereCPAs. MostCFOscamefromtreasury,securitiesorbankingbackgrounds,notfrom accounting.OnlyafterSarbanesOxleyhasthepercentageofCFOswhoareCPAs risento45%.Thesamearticlealsorevealedthatbroadexperienceoutsideof accountingwasakeycommondenominatoramongCFOs. WhatcanyoudotoincreaseyourchancesofrisingtoCFO?PassingtheCPAexam isagreatstart.However,youshouldviewitasthebeginningofyourjourney,nota guaranteedticketofsuccess.TheknowledgeaCFOneedsismuchbroaderthan

The Top Spot: Why More Companies are tapping their Finance Chiefs for CEO. Don Durfee, CFO Magazine, October 1, 2005

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whatyoulearnedinpreparingfortheCPAexam.Furthereducation,formaland informal,isrequiredtobeaneffectiveCFO. AgoodwaytocontinuedevelopingyourskillsistoenrollinanMBAprogram.The differenceinthequalityofprogramsisimmense.TopMBAprogramsfocuson turningouttoplevelexecutives.Stretchyourselfandtrytoattendthehighestrated programthatyoucan. TogetyourCPA,youstudiedfinancialaccounting,taxationandbusinesslaw.You probablywillnotneedanymoreexposuretothesetopicsinanMBAprogram. Studybanking,costaccounting,finance,humanresources,informationsystems, organizationalbehaviorandoperationsmanagementinstead.Sittingforthe CertifiedManagementAccountant(CMA)orCertificateinFinancialManagement (CFM)examinationswillsolidifyanddocumentyourskillsinmanyoftheseareas2. Yourchancesofobtainingthetopfinancialspotareobviouslymuchhigherifyougo toworkforasmallerorganizationthanforaFortune1000company.Asmaller companyaccountantprobablyhasmuchbroaderexperiencesthansomeonewould inalargeorganization.IfyoudocashmanagementforaFortune1000company, youprobablyknowyourareaverywell,butnotmuchaboutfinancialissuesinother areasofthecompany.However,asmallcompanyfinancialmanagermayhave experienceineveryfinancialarea. Myownresume,atthetimeIgotmyfirstOnlyFinancialOfficer3(OFO)job, typifiesthebroadbackgroundsmanyCFOshave.Thatresumeshowedascience undergraddegree,ayearworkinginqualitycontrol,anMBAwithanaccounting majorandfinanceminor,fiveyearsexperienceattwomajoraccountingfirms consistingofalittleauditingexperience,andafeasibilitystudyforapublicbond

In the United States, the Institute of Management Accountants (IMA) administers the CMA and CFM programs. CMA-Canada offers a similar, but perhaps more rigorous, CMA certification. Twenty-four Canadian universities offer joint MBA/CMA programs. 3 Executive Education, Inc. offers a popular one-day Only Financial Officer seminar, through many accounting associations.

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offering,butmostlyITconsulting.Ihadalsopassedtheprofessionalexamsthat allowedmetoputCPA,CMAandCPIM4aftermyname. WhenItookthatsmallcompanyCFOjob,Ihadneverclosedasetofbooksinthe realworld.However,myknowledgeofcorporatestrategyallowedmetocontribute toamajorcompanychangeindirectioninmyfirstsixmonths.Thischangeledtoa sixfoldincreaseinthecompanyssizeoverthenexttenyearsandeventuallyIwasa largecompanyCFO,withotherfinancialprofessionalsworkingforme. WhatisyourcurrentleveloflearningtowardCFOlevelskills?Thereisalotmore toknowtobeaneffectiveCFOthanmostaccountantsimagine.Anyoneaspiringfor ahighleveljobofanytypeshouldembarkonapersonalmissionoflifelong learning. AstatisticsometimescitedinInstituteofManagementAccountants(IMA) publicationsisthatpeoplewhoreadsevennonfictionbooksayearearnmorethan twiceasmuchmoneyaspeoplewhoreadonlyone.Nonfictionincludesbiography, history,selfhelporbusinessbooks.Ifyouaskaccountantswhotheyknowwho readsthatmuchnonfiction,theanswerwilloftenbetheCFOortheCEO.Ifyou wanttoriseinthecorporateworld,youshouldbereadingtoo. IrealizethatitmightbeunrealistictoaskeveryonewhoaspirestobeCFOtoread sevennonfictionbooksayear.Instead,Iwillaskyoutosetapersonalgoalof readingfourgoodbusinessbooksinthenextyear.Itwillhelpyourcareer.I guaranteeit.

JOHN L. DALY, MBA, CPA, CMA, CPIM, is President of Executive Education, Inc., a developer of continuing education seminars specifically designed for corporate financial executives. Forty accounting associations offer Executive Educations seminars. Before that, John spent fifteen years as chief financial officer for a Tier 1 automotive supplier and a large restaurant chain. He also has been interim CFO for several companies. You can reach him at Daly@ExecutiveEducationInc.com.
The American Production and Inventory Society administers the Certified Production and Inventory Manager examination.
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Executive Education, Inc.

734-475-0600

 Executive Education, Inc.

734-475-0600