You may be wondering what to study to be a CFO . In this case, due to the functions of the position and the necessary competencies, it is necessary to take a higher education in the area of economics and business . However, it is increasingly necessary to have a Master, Postgraduate or Higher Specialization Course in any of its subareas.
Funding, public and private entities (including non-profit ones) is of vital importance. It is about the sustenance that allows to develop the activity . Whether it is your own (with business profits) or someone else's (using external sources), it must be carefully structured. In the same way that it is essential to design an architecture on how to use money (investment). Hence, it is important to study to be a CFO.
What functions does a CFO have?
The CFO is a person with great responsibility in the corporate bosom . All decisions regarding investment or financing needs go through his office and he plays a relevant role on the Board of Directors. Naturally, they must be trained , since they must carry out their own tasks of analysis, control, management, strategy, negotiations, etc.
We are going to review some of the most common functions that a CFO performs and, based on them, we will analyze the skills required to know what to study:
- Treasury management: collections and payments are more than money inflows and outflows, they are a form of relationship with customers and suppliers. Its management is necessary without jeopardizing the liquidity of the company. In addition to knowing how to manage the financial instruments of collection and payment, you must bear in mind the means and alternatives of short-term financing. Without having an important task: How does the entity manage defaults?
- Cost control: where does the money go? Can the expense be reduced? To have a control it is necessary to measure. And measuring implies analyzing. Knowing how to analyze allows you to make decisions and improve efficiency. Understand the nature of costs and consider whether revenue allows
- Search and evaluation of financial sources: knowing how to maintain relationships with financial entities, determine if the solutions they provide us are the most suitable or there are better alternatives and if there are other types of opportunities to obtain funds. In addition, knowing how to negotiate to get the required money with the best possible conditions. To do this, you must know the financial situation of the company and know how to use the strengths and improve the weaknesses.
- Promote expansion projects: so far we have seen the financing part, that is, getting money. But the roles of a CFO also include how to reinvest money for further business growth. Even if there are no reserves or treasury surpluses, it is possible to obtain financing to undertake an expansive project, but the cost of the same and the profitability of the investment must be analyzed.
- Financial investments: Can the company invest in financial markets to better optimize cash surpluses? How to manage this type of investment?
What to study to be a financial director?
As we have seen, a CFO must have certain qualities, especially related to analysis, management, negotiation and strategy to make decisions . But what training is it that provides these skills? What do you need to study to be a CFO?
In principle, it is essential to have a degree in any of the sciences oriented towards economics and business:
- Degree in Business Administration and Management (ADE).
- Degree in economics.
- Double degree in Business Administration and Law.
However, most companies consider a postgraduate degree , so that their financial director is specialized in a specific subject in this field (for example, risk management, cost management, financial investments, etc. ). An example would be the Master in Financial Management or the Master Business Administration (MBA).