Although big public companies may have established the chief financial officer position, midsize and even small businesses are increasingly hiring CFOs. A new air mobility design and manufacturing company in Massachusetts with fewer than 20 employees and a 94-bed community hospital in Hawaii are two recent employers seeking full-time CFOs, according to job-search websites.
CEOs who are at a strategic crossroads and appreciate the value of a knowledgeable financial adviser who can assist them in expanding their market share and their companies are frequently the ones driving that investment in expertise.
In short, smart businesses now see the CFO position as more of an investment than an expense, whether it be internal or performed on a virtual or fractional basis.
Undoubtedly, a global pandemic made it clear how important it is to have an experienced person in charge of the finances. But in our opinion, the rise of the CFO isn’t just a result of the current economic situation. Let’s examine the role, duties, and abilities that finance chiefs require in order to effectively serve their organizations.
Role of Chief Accountant
Education
A CAO must possess a Certified Public Accounting (CPA) certificate, which is necessary for anyone filing corporate documents with the SEC, as well as a bachelor’s degree in accounting, finance, economics, or business management. However, the majority of businesses prefer their CAO to have an MBA or other advanced degree in accounting, finance, or economics.
What is a chief accounting officer?
A senior executive who oversees all accounting operations in an organization is a chief accounting officer, also known as a vice president of accounting. They are in charge at the highest levels of accounting operations, from accurate bookkeeping to tax and regulatory compliance. They also assist a business in developing its long-term financial strategy.
What does a chief accounting officer do?
The duties of a chief accounting officer in an organization’s accounting department are extensive. They oversee a group of finance experts who meticulously maintain crucial day-to-day financial operations and guarantee the viability of the business. Typically, the CAO reports to top management, including the CEO and the board of directors, while working side by side with the CFO. Some of their important duties include:
How CAO and Controller Positions Differ from the Chief Financial Officer
When choosing between the positions of chief accounting officer vs. It’s crucial to consider a different possible career path for a controller: that of a chief financial officer (CFO). The CAO’s role is much narrower than a CFO’s. The financial aspects of all business operations, including forecasting and strategy, budgets, credit management, tax preparation, insurance, and more, are managed by chief financial officers. In a nutshell, the CAO supports the CFO’s financial planning and strategy while having primary responsibility for ensuring the timely completion and accuracy of accounting tasks.
The knowledge and skills needed for the CFO position are also much more extensive than those needed for the controller position. CFOs in particular require in-depth knowledge of business procedures and how the organization’s financial systems fit into its variety of operations. Compared to controllers, whose focus is primarily on accounting, recordkeeping, and financial reporting, chief financial officers (CFOs) must have a much deeper understanding of business risk, funding, and capital structures.
A candidate should typically have at least five years of experience in a senior financial management position, as well as practical knowledge of financial management and accounting in a business or organizational setting, to be eligible for a CAO position. Additionally, CAOs should be knowledgeable about tax law and business management programs like SAP and Salesforce. A CAO must have a strong business sense about the company’s objectives and strategies as well as a general understanding of the markets and innovations that will have an impact on those areas.
Successful CAOs must possess strong leadership qualities in addition to these crucial hard skills to assist others in achieving predetermined organizational goals. Strong “people” abilities, including the ability to communicate, think critically, solve problems, and adapt, are also necessary for CAOs. These CFO competencies are necessary for productive discussions and planning sessions with the CFO and other C-suite executives of an organization.
The daily financial management of the company, including bookkeeping, licensing, compliance with regulations, cash accounting, and budget management (though budgeting may fall under the purview of specific business departments with the controller’s assistance), is generally the focus of a controller’s skills. The top criteria for the controller position are exceptional accounting and financial skills. However, interpersonal abilities are also crucial for the numerous controllers tasked with finding, hiring, developing, and overseeing staff in the accounting and finance departments.
Like CAOs, controllers must excel in the role by possessing a strong set of leadership and soft skills. Controllers mainly use these abilities when interacting with an organization’s line employees.
Both chief accounting officers and controllers must have similar levels of education. CAOs and controllers commonly hold a Certified Public Accountant (CPA) certificate in addition to a bachelor’s degree in accounting, finance, economics, or business management, which is necessary for anyone filing corporate financial documents with the Securities and Exchange Commission. An MBA or other advanced degree in accounting, finance, economics, or business administration with an emphasis on accounting is preferred by many employers for CAO and controller candidates.
The Certified Management Accountant (CMA) from the Institute of Management Accountants, the Certified Internal Auditor (CIA) from the Institute of Internal Auditors, and the Certified Information Systems Auditor (CISA) from ISACA (formerly the Information Systems Audit and Control Association) are additional certifications available to aspiring CAOs and controllers in addition to a CPA license issued by a state Board of Accountancy.
According to the U.S. Census Bureau, CAOs are classified as top-level business executives. S. Bureau of Labor Statistics (BLS). According to the BLS, the median yearly salary for chief executives, including CAOs, was $185,950 in 2020. As an alternative, PayScale, a compensation resource, reports that as of 2021, the median annual chief accounting officer salary is $177,384. The 10% with the lowest reported salary earn around $92,000, while the 10% with the highest reported salary earn around $255,000.
According to the BLS, employment opportunities for top executives, including CAOs, are anticipated to increase by 8% between 2020 and 2030. This roughly corresponds to the average growth for the labor market overall.
As of 2020, according to the BLS, the median annual salary for finance managers—which includes controllers—was $134,180. According to PayScale, as of 2021, the median annual salary for corporate controllers is $101,431. The lowest 10% of earners are reportedly paid about $68,000, and the highest 10% are reportedly paid about $151,000. According to PayScale, as of 2021, the median annual salary for financial controllers is $85,714
For the upcoming few years, controller employment prospects appear promising. The BLS predicts that between 2020 and 2030, employment of finance managers, which includes controllers, will increase by 17%. This is significantly faster than the BLS’s prediction of 8% job growth across all professions.
What Does a Chief Accounting Officer Do?
A chief accounting officer’s (CAO) duties include overseeing a company’s accounting division and controlling daily operations. You prepare the budget and regulatory reporting, as well as track and evaluate financial data in relation to the budget or other metrics, in this career. Leading the accounting team, creating quarterly and annual financial reports, including audited financial statements, researching previous financial reporting, and managing general accounting, such as fixed assets, accounts payable, and receivables, are additional responsibilities. Additional responsibilities include managing accounting for payroll, workers’ compensation, healthcare, bonuses, bank reconciliations, and other areas. You create presentations and provide data for cost reports to analyze the company’s financial situation and make suggestions for performance improvement.
How to Become a Chief Accounting Officer
A bachelor’s degree in accounting is required to become a chief accounting officer, but some positions also call for professional accounting experience, industry-specific knowledge, and a master’s degree depending on the company you work for. For instance, you need additional knowledge when working for a bank, such as the most recent FDIC regulations You must be very proficient with computers and be familiar with a variety of software, including project management tools, databases, and accounting software. Strong written and verbal communication abilities are essential, as are presentation skills, the ability to lead others, patience, and organization.
FAQ
What are the responsibilities of a chief accounting officer?
The organization’s cost controls, ledger and financial accounts, as well as other financial reporting and auditing duties, are all under the control of the CAO. They collaborate closely with the chief financial officer (CFO) to report on financial activities and assess the financial impact of significant business decisions.
Is chief accounting officer same as CFO?
The CAO oversees all activities in the accounting division of a business, particularly the daily operations. The chief financial officer (CFO) oversees the company’s finances and is responsible for managing things like budgets, forecasts, credit, taxes, and insurance.
