CFO Role: One of Many Great Careers You Can Do with an Accounting Degree
For the short and simple answer to whether a CFO needs an accounting degree, no! Financial accounting is no longer a prerequisite. However, the function of a Chief Financial Officer (CFO) is changing, evolving away from needing a purely technical accounting background and focusing more on strategic financial analysis capabilities.
This shifting landscape highlights a critical truth: a background in accounting and finance provides the foundational knowledge and skillset needed for success in a variety of careers, including the C-suite. The modern CFO role, demanding strategy, operational expertise, and risk management, is one of many high-potential accounting careers you can pursue after earning an accounting degree.
We will explore why the CFO’s job is changing, and how the skills gained from your degree in accounting are essential to managing future recessions, developing business strategy, and achieving a top average annual salary.
The Evolving CFO: Strategic Leader Over Technical Accountant
The responsibilities of today’s CFO extend beyond the accounting and finance departments. Instead, they perform a role that is more connected to the company as a whole like Human Resources, IT, and risk management besides accounting and finance. Companies seek a CFO with strong operational expertise to help them manage these changes.
In place of being a lead technical accountant for the firm, the CFO will take on a more active role as a company visionary. Their new responsibilities will include increasing and automating operations. This will ensure that the firm’s cash flow is sufficient enough to meet its obligations. For fresh and aspiring CFOs, strategy is increasingly important.
Financial Planning Roles: The Career Path from Analyst to CFO
The responsibilities of today’s CFO extend beyond the accounting and finance departments. Instead, they perform a role that is more connected to the company as a whole, including Human Resources, IT, and risk management. Companies seek a CFO with strong operational expertise to help them manage these changes.
In place of being a lead technical accountant for the firm, the CFO takes on a more active role as a company visionary. Their new responsibilities include increasing and automating operations to ensure that the firm’s cash flow is sufficient to meet its obligations. For fresh and aspiring accounting professionals, understanding strategy is increasingly important.
The Deep Value of an Accounting Degree in the C-Suite
Accounting and finance are always changing. The accounting industry has been shifting from a focus on development to one on financial reporting and compliance. Now it is very common for a CFO to not need an accounting background to excel at his or her job. However, finding a CFO with a background in accounting provides an even deeper level of understanding and enables the CFO to better explain changes in the business.
The world of accounting and finance continues to advance in order to meet the problems posed by the global climate and economy. This will continue to be the case with the role of the CFO. This evolution will occur as society progresses, changing accounting and finance functions. Each of these responsibilities will alter along with the world. Of course, the CFO of tomorrow will rise to cope with new situations and challenges as they surface.
Future-Proofing Your Career: Skills Beyond Technical Accounting
Every year, the world of accounting and finance changes because of new developments. After 2002, professional accountants shifted their focus away from revenue growth and to financial reporting and compliance. In 2008, the financial community saw a further shift towards an all-encompassing business strategy during the Great Recession. Now, in 2022, the CFO is increasingly responsible for strategic planning and growth. As the financial industry continues to grow, the role of the CFO will continue to evolve as well.
In its early stages, accounting and finance focused on making sure that business records were correct, managing transactions, and maintaining financial accounts and the CFO was responsible for overseeing these tasks. As time progressed, the role of CFO expanded to include budgeting, forecasting, and financial analysis. Today, the role of the CFO has evolved even more and is increasingly responsible for strategic planning and growth.
Frequently Asked Questions
- What are the best career paths for those with an accounting degree? While many graduates become a Certified Public Accountant (CPA) or an auditor, an accounting degree provides a versatile foundation for roles such as financial analyst, budget analyst, finance manager, and financial examiner. The skills in financial reporting and data analysis are also highly transferable to entrepreneurship and management consulting.
- Can you become a CFO without a background in accounting? Yes, it is increasingly common for companies to appoint CFOs from broader business, operations, or strategic backgrounds. While you don’t necessarily need a formal accounting qualification, today’s CFO must still possess a strong “appreciation” for accounting fundamentals to effectively oversee financial disclosures, audits, and compliance.
- What is the average annual salary for accounting-related roles? Salaries vary widely based on the specific career path:
- Auditors and Accountants: Median pay is approximately $79,880.
- Financial Analysts: Median pay is approximately $99,890.
- Finance Managers: Median pay is approximately $156,100.
Chief Financial Officers (CFOs): Can earn upwards of $261,533 per year.
Conclusion
As CFO roles move away from an accounting background it will have implications for other accounting roles in the company. Because of the reduced focus on technical accounting, the need for Chief Accounting Officers (CAOs) and controllers with extensive accounting knowledge will grow smaller. Companies that have a CAO, will be responsible for overseeing financial analysis and strategy, which will be a departure from their historical role. The need for CFOs with accounting backgrounds will decline as well.
This is why accounting agencies like Luca Financial are ready to help ease the burden and assist CFOs, so that they can focus on other parts of the job, like getting the company ready for growth and expansion.
At Luca Financial, we pride ourselves on offering CFO’s a well-rounded batch of services when it comes to their business.
- Work with CFO’s on identifying opportunities for growth
- Preparing budgets that will accommodate any expansion plans or a potential exit strategy
- Provide advice about how best to upscale without compromising service quality, while still being cost-effective
- We take our time so each client gets an individualized experience from start until finish
- Offer nothing but top-notch financial services
A list of effective solutions to your financial accounting needs is available to CFOs looking for help. Please contact Luca Financial today or schedule some time with us!