What is CFO? Role and roadmap to become a successful CFO
In modern business, the CFO position plays a key role in the management and financial development of a company. So what is CFO and how to become a successful CFO? Join 1C Vietnam to learn detailed information about this important position, along with a full development roadmap to conquer the goal of becoming an excellent CFO.
1. What is CFO? Role of CFO in business
CFO stands for Chief Financial Officer - a key position in a business. The Finance Director is responsible for financial management, including research, analysis and handling of financial risks, thereby building and implementing effective financial plans. At the same time, CFO also gives warnings about potential risks through financial analysis.
The role of the CFO is clearly demonstrated through the following factors:
- Operator: Ensuring smooth and effective financial operations.
- Strategist: Outline the financial development strategy for the business.
- Steward: Protect assets, ensure the accuracy of books.
- Catalyst: Spreading a culture of financial thinking throughout the company.
2. Necessary conditions to become a CFO
The Chief Financial Officer (CFO) is the person responsible for planning and managing corporate finances, ensuring the business operates effectively. To take on this great responsibility, candidates must fully meet the key elements, including:
- Education: Advanced degree in finance, accounting, business or related fields; often have an MBA or professional certification such as a CPA.
- Experience: Financial leadership experience in an organization.
- Skills: Deep understanding of finance, negotiation skills, effective communication and leadership skills.
- Strategic thinking: Ability to manage financial data and company development orientation.
3. Main jobs and tasks of the CFO in an enterprise
The CFO (Chief Financial Officer) plays a key role in directing and managing the financial activities of the business. As a senior leader, CFO takes on the following key responsibilities:
3.1 Monitor and evaluate financial activities
To ensure the financial "health" of a business, closely monitoring cash flow and expenditure is extremely important. Thanks to that, the CFO can easily evaluate the effectiveness of each business plan, thereby making timely adjustments to increase financial indicators.
3.2 Financial planning consulting
Based on analyzing weaknesses in past and current financial plans, CFOs play an important role in supporting businesses to overcome financial crises. They advise the Board of Directors on solutions to use capital effectively, including optimizing investment activities, mobilizing capital appropriately and proposing appropriate financial strategies to get the business through difficult times. towel.
3.3 Financial reports
The Chief Financial Officer (CFO) will be responsible for optimizing the financial performance of the business. They spend most of their time preparing and analyzing financial reports, which clearly reflect all the company's strengths and weaknesses. Thanks to strategic analysis capabilities, CFOs can make wise decisions, contributing to promoting sustainable development for the business.
3.4 Liquidity
The CFO must ensure the business has enough ability to pay short-term debt. If the liquidity index is greater than 1, it is a sign of strong financial "health", minimizing crisis risks and effectively attracting investors. Ensuring short-term solvency is an important responsibility of the CFO, contributing to the sustainable development of the business.
3.5 Optimize ROI index
The common goal of every business plan is to increase the Return on Investment (ROI). The higher the ROI value, the greater the business performance, reflected in profits exceeding investment costs.
The important role of the CFO lies in calculating and clearly distinguishing revenue and profit. Revenue is high but not necessarily profitable. Therefore, CFOs need to reevaluate financial plans and marketing strategies if revenue is high but profits are low.
3.6 Coordinate well with many other departments
To effectively save costs, departments within the company need to coordinate smoothly, especially the Finance (CFO), Communications and Human Resources departments. Communication is an important part of business operations, but if not managed and operated properly, it can cause financial risks. In addition, the CFO also needs to coordinate closely with other departments, especially with the Chief Human Resources Officer (CHRO), to optimize recruitment costs and ensure that these expenditures bring the highest efficiency. for Business.
Failure to properly plan media and advertising costs can lead to unnecessary financial risks. CFOs need to consider and regulate the budget strictly to avoid unnecessary costs and ensure sustainability in the company's financial strategy.
3.7 Establish and develop relationships
Chief financial officers (CFOs) need to promote foreign affairs activities, especially when they manage investment capital for businesses. The CFO acts as a trusted "bridge" between businesses and banks and investors, helping businesses build and maintain strong financial relationships. Thanks to that, businesses can effectively mobilize investment capital, creating a solid foundation for development in today's fiercely competitive business environment.
3.8 Support audit activities
CFOs need to ensure transparency and legal compliance in the financial activities of the business. They are responsible for explaining to auditors the legality and honesty of financial reports and accounting books. Thanks to that, the CFO can receive opinions from auditors about gaps in business operations and implement timely corrective measures.
3.9 Debt management
In a transparent business, managing legal contracts, potential debts, tax obligations, etc. is extremely necessary. And the key position to take on this responsibility is the Chief Financial Officer (CFO). CFOs are knowledgeable about law, finance and have strategic vision. They will help businesses comply with regulations, avoid potential risks and ensure transparent and effective financial operations.
4. Roadmap to becoming a successful CFO
The path to becoming a successful Chief Financial Officer (CFO) requires a combination of technical knowledge, practical experience and soft skills. Below is a detailed roadmap to achieve this goal:
4.1 Possess a relevant specialized degree
To become a successful Chief Financial Officer (CFO), you need to equip yourself with a solid knowledge base in the fields of finance and accounting. Bachelor's or graduate degree in Finance, Accounting or related field is a prerequisite.
In addition, individuals should participate in advanced study programs such as MBA specializing in accounting and finance or MBF to hone professional knowledge and skills. Studying for graduate school not only helps improve your qualifications but also expands relationships with industry experts, creating a solid foundation for a future CFO career.
4.2 Get specialized certificates in the field
Besides the MBA or MBF programs, pursuing additional professional accounting certificates such as CMA (certified management accounting) and CPA (certified public accounting) is an effective way to improve your capacity. and increase promotion opportunities, especially for the position of Chief Financial Officer (CFO).
Compared to non-certification holders, holding a CMA or CPA brings in higher income. However, each certificate has its own unique strengths:
- CPAs focus on tax, auditing and compliance activities, suitable for those pursuing expertise in financial reporting and internal controls.
- CMA focuses on decision-making, planning and forecasting activities, suitable for those pursuing a CFO position, requiring strategic thinking and foresight in financial planning for businesses.
4.3 Accumulate experience
CFO is not only limited to the field of accounting but also plays a key role in many other areas such as IT, Human Resources, Supply Chain, Investor Relations,... Therefore, to become an excellent CFO , each individual needs to cultivate comprehensive experience in many fields to have a broad vision, make wise decisions and lead businesses to sustainable development.
4.4 Developing management capacity
To conquer the CFO position, each person needs to be equipped with leadership skills. Impression management skills will help individuals stand out, attract employers and create a competitive advantage.
Participate in extracurricular activities, practice communication skills, presentation, negotiation and team building. At the same time, cultivate strategic thinking, wise decision-making ability and foresight to become a talented leader, leading your business to success.
4.5 Build a solid career
To become a successful CFO, you need to have a clear strategy and start taking action today. Identify a suitable working environment, build a network of useful relationships and continuously cultivate professional experience.
While the path to a CFO position can take many years, it is possible to speed up the process by gaining practical experience early on. Participating in virtual CFO programs or pursuing professional qualifications such as CMA will help strengthen the necessary knowledge and skills, ready for the CFO position in the future.
5. 1C:ERP solution supports CFOs in effective corporate financial management
1C:ERP is a comprehensive business management solution developed by 1C Vietnam. The solution owns many modules, supporting every member of the business. In particular, 1C:ERP has become an effective support tool for CFOs in improving corporate financial management.
1C:ERP's comprehensive cost management system helps CFOs optimize operating costs and save resources by classifying details by product, business activity and financial results. This helps CFOs easily control and effectively reduce costs.
1C:ERP's flexible strategy and budgeting system supports CFOs in making overall financial plans for the business, flexibly adjusting to each stage of development and market fluctuations. Thanks to that, the CFO makes accurate financial forecasts and proposes optimal solutions to achieve business goals.
With superior features and practical benefits, 1C:ERP is a reliable solution that helps CFOs manage finances effectively, contributing to the overall success of the business.
6. Distinguish between CFO and some other concepts
CFO is often confused with a number of other positions, so making a clear distinction between CFO and other titles is extremely important. Here are some concepts that are often confused with CFO:
6.1 How are CEOs and CFOs different?
The CEO is the leader responsible for the company's business results and must only report to the Board of Directors. Meanwhile, the CFO is the person who directs the financial strategy and has the highest responsibility for the financial sector, ensuring the company's financial activities are operated effectively and sustainably.
6.2 How are CFOs and chief accountants different?
CFO (Chief Financial Officer) and Chief Accountant both play important roles in the financial management of the business. However, these two positions have key differences in terms of position, responsibility and strategic level,...
Comparison factor | Chief Financial Officer (CFO) | Chief accountant |
Location | Head of the finance department, comprehensive management of financial activities | Head of the accounting department, managing accounting work |
Responsibility | Develop and implement financial strategies and financial risk management | Manage accounting processes and financial reporting according to regulations |
Planning | Financial strategy, capital mobilization, investment | Accounting plan, budget, revenue and expenditure |
Financial analysis | Analyze the market, evaluate competitors, make investment decisions | Monitor operational efficiency and evaluate financial situation |
Resource management | Mobilize capital, invest, manage cash flow | Management of fixed assets, circulation, and inventory |
Financial report | Financial statements, statements of changes in equity, cash flow statements | Business results reports, balance sheets, financial statement notes |
Regulatory compliance | Tax, securities, insurance | Accounting system, accounting standards |
Internal control | Establish and maintain financial internal control system | Establish and maintain accounting internal control system |
Thus, 1C Vietnam has explained in detail what CFO is and shared the roadmap to achieve the goal of becoming a successful CFO. Hopefully, the information in this article will help individuals better prepare for a career in finance. On the journey to becoming an excellent CFO, 1C:ERP will be an effective solution with a variety of management modules, suitable for all types of businesses, especially manufacturing businesses. Please contact 1C Vietnam immediately for advice on implementing 1C:ERP solution for your business!