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Becoming a CFO (non-accountant background)

Proformative, **First, a bit of background:** A few years ago, I started my own company - we received investment funding, went through the #2 accelerator in the US, and generated a modest revenue. Ultimately, we opted to shutdown the company. **Current Scenario:** Fast forward to today and I've onboarded with a great company handling the Operations and Finance. I've been working with the CEO and CTO handling AR/AP, FP&A, and helping structure our Series A raise. I've taken a keen interest into the financial side of the business and would like to position myself to become a CFO (whether it be in my current company, or a future company in a few years). The CEO and CTO are aware of my interest in finance and support me in learning more about accounting/corporate finance. **Concerns: ** I am not a CPA (the defacto profile of most CFOs) and I do not see myself going back to school to take 150 credit-hours in accounting. However, I am very interested in becoming a CFO. **Questions:** 1) I've read of the CFM and CMA being beneficial for non-accounting individuals - what is the industry's view of the CFM and CMA? Do these certification carry any significance? 2) What would the path-of-execution be to position myself to become a CFO if I cannot obtain a CPA? **NOTE** There are a few CFOs out there that do not have CPAs - all seem to be external hires: CFO Lyft: https://www.linkedin.com/in/brianrobertspublicprofile CFO Palantir: https://www.linkedin.com/in/jasonportnoy CFO Tesla Motors: https://www.linkedin.com/pub/deepak-ahuja/9/2b6/953 https://www.linkedin.com/in/tanger

Answers

Dan Kardatzke
Title: CFO
Company: Solstice Mobile
(CFO, Solstice Mobile) |

I'm a CFO without a CPA or MBA and my best advice to you is to get as much experience as possible with your current firm and demonstrate you deserve the title by not only owning the finance and operations aspects of the firm but demonstrating that you can also be strategic with the CEO and CTO. There are many articles around being a "Strategic CFO" and becoming one yourself will carry more weight than any certification as either your current or a future CEO will look for a partner to help guide them from the CFO chair.

Kate West
Title: President
Company: The C Corps, LLC
(President, The C Corps, LLC) |

Jon, for business purposes, I think the CMA is superior to having a CPA. (My personal disclaimer: I have passed the CMA exam, but I have never attempted the CPA exam.)

The breadth and depth of knowledge you must possess to pass the CMA is comparative to the CPA; however, the CMA is more specific to business. Since you have an interest in finance, I would encourage you to entertain the CFM or CMA as leverage to help you position your career in that direction. Having experience is wonderful and necessary - and it will aide in obtaining the certifications; however, having the certification sends a message of commitment, diligence, expertise, and knowledge to employers [current and future].

I hope that is helpful for you.

Anonymous
(Tax/Business Consultant) |

First... let's get the "titles" out of the way!
As you've mentioned, there are LOTS of CFOs who are not CPAs or don't have a MBA.

"Do these certification carry any significance?"
Unfortunately, for some people, esp. the business world, it does.

Would it truly help? Maybe, depending on the person. It won't be you an expert but the degree could open up the mindset of finances/accounting.

Learn as much in your role and take some courses in areas that you feel could benefit you esp. if you're unsure of the subject area. Certificate programs are a great way to learn a subject area instead of spending too much resources on getting a formal degree in accounting or a MBA.

Looks like you have a good grasp of what's going on in your role at your company.
If the company intends to expand, you may want to see about further education to help you with your business background.

Good luck!

James Scott
Title: Consulting CFO
Company: Early Growth Financial Services
LinkedIn Profile
(Consulting CFO, Early Growth Financial Services) |

I recommend you procure an MBA, and study for and earn your CMA designation. It worked for me. If I was doing it all today, I would definitely get my MBA online. Many great, low cost programs available.

Ross Anderson, CPA, MBA
Title: Controller
Company: TFS Capital
(Controller, TFS Capital) |

You don't necessarily need a CPA or MBA. The last company I worked for did not have his CPA or a graduate degree, but he had an accounting undergrad degree and spent time as an auditor and then as an investment banker, so he knew finance quite well. You will need to gain a great understanding of your company's financials and identify any weaknesses that you personally have. You may also want to get some consulting help to identify areas of weakness in your current systems and for further understanding of the accounting aspect (which is only part of the CFO role). You could also hire a controller to handle all the pure accounting stuff and help you along. A CFO is not necessarily an accountant, but they are the financial leader which doesn't necessarily mean they are an accounting expert.

Mark Matheny
Title: VP - FInancial Planning and Analysis
Company: Novolex (formerly Hilex Poly)
(VP - FInancial Planning and Analysis, Novolex (formerly Hilex Poly)) |

I know of many CFOs without a CPA or any other certification. The key issue is gaining credibility with the external constituencies that are going to make quick judgments on your ability based 0n your resume. One way to overcome this is to surround yourself with talent that makes up for your weaknesses. Having a strong number two with an accounting background, for example. Also, developing a good working relationship with your auditors.

Matthew Horn
Title: VP Finance/Admin
Company: Modern Materials, Inc.
(VP Finance/Admin, Modern Materials, Inc.) |

I began work as a junior staff accountant doing bank reconciliations mostly with an undergrad degree in Management. Through timing I eventually became a CFO with a small, family company 7 years later. I've recently left the company for a larger one and will be their controller. I've not gotten my CPA yet nor do I have a degree in accounting. My experience was that what your resume says about your job duties and how you interview do more for you than having the certs. That being said, I do plan on getting my CPA over the next few years, but that is mostly because I want the class knowledge of the tax side which I'm missing currently. I may also get my Certificate of Accountancy which many universities now offer. It is designed for non-accounting degrees to get CPA exam-ready. You don't have to sit for the exam, but it shows that you've taken the relevant coursework. I've read posts of some stating that the recession limited their opportunities because they didn't have the certs despite being good at their jobs. I'm sure that having the cert will give a potential employer a certain peace of mind, but only you can do the job.

Roxanne Orticke
Title: Senior Director of Finance
Company: NACHA
(Senior Director of Finance, NACHA) |

This is a very touchy subject, and a question I face daily. I have an MBA, and have fallen in an out of the trance to get a CPA. I've always said, "the CEO's and Presidents that may not otherwise know you have the skill and aptitude to handle their financial business matters, only recognize the "street cred" of a 'CPA'...when all that really means is that you are certified to report on public accounting matters." CPA means a lot more on the "street", and meeting someone cold, those letters open doors. However, if you are able to demonstrate organically that you know the business financial materials, and are sure you can demonstrate accounting acumen to the staff that will be working for you, I agree that you can become a CFO for a business, without an MBA or CPA.
All that said, I am currently entranced about the CMA--I do believe to be strategically valuable to your fellow internal business partners, that is the way to go.

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

I am also a CFO without a CPA or CMA. I do have an MBA, and for me gaining experience was the best education.

You have been through a startup and a shut down, so you have insight into important areas of the business that many don't get to go through. Watching companies fall apart and understanding why and how they could have possibly avoided that outcome was huge in my career and growth and I believe what paved my path to where I am today.

I have a passion for what I do and it sounds like this is also your passion. Your CEO and CTO supporting you is the first step you need. Have you asked them what they will prefer for you to have? Do they even require you to have a certification or can you continue to gain experience on the job and work your way up to CFO? .

Mark Sutherland
Title: CFO
Company: Profit By Design CFO & Controller Servic..
(CFO, Profit By Design CFO & Controller Services) |

I am a CFO without a CPA. However, I have a bachelor's in Business, emphasis in finance, and most of my Masters/MBA course work was in accounting and corporate finance. I agree with the others on the value of the CMA and, even more so the underlying coursework. You already know the arguments for degree vs. no-degree. Practically speaking, as a CFO, I don't have the time nor desire to monitor the never-ending changes to tax code, which is why I didn't bother to get my CPA, and why I rely on our outside CPA which has always been the best allocation of my time as a CFO. Sure, I read tax newsletters, but I let my outside CPA guide me through the nitty-gritty. In my opinion, at a minimum you MUST have a good grounding in accounting (financial, cost and managerial) and corporate finance whether by formal degree path or otherwise. How will you lead and assist your controller and accounting team if you don't have a command of the accounting work that they do? Reporting is a critical part of the CFO's job. How will you know if your reports are telling an accurate story if you don't understand the underlying accounting work that generated your data? What if the accounting is wrong? How will you know? Who's going to help the controller fix the problem? (the accounting gets more complicated with big ERP programs, multiple segments, etc., and Controllers need help from time to time). Remember that the decisions that emanate from your reporting often effect people's jobs, so I always want to KNOW that the numbers I'm working with are right.

Anonymous
(CFO) |

A few thoughts:

1) Those with TLAs (Three Letter Acronyms) like MBA and CPA are not necessarily competent. (I've seen lots of proof...)

2) Those without TLAs can be extremely competent. In fact, the most knowledgeable Controller who ever worked for me was neither an MBA nor a CPA.

3) Having the TLAs, however, really helps in the COMMUNICATION process with those who don't know you. They say that you worked hard enough/were smart enough/were dedicated and motivated enough to 1) get admitted to an MBA program, 2) complete it (and presumably pick up some business skills) and 3) pass the CPA exam (which suggests that I know accounting).

4) It's not uncommon to get dozens of resumes submitted for any open position. In those situations, objective credentials such as a degree, an advanced degree, a certification, can mean the difference between further consideration and initial rejection. I know that I started receiving more responses to resume submissions after becoming a CPA (even though I had an MBA).

5) The CPA credential, in particular, is useful because many business managers/owners, HR professionals, etc. do not know enough to test your accounting knowledge in an interview. And, since all CFO candidates will answer "of course" when asked if they are skilled at accounting, non-accountants feel much better when the candidate has passed an objective, external qualification process.

6) A business background can substitute for either or both TLAs. For example, my former colleague at Ford, Deepak Ahuja (who is a great guy) had an extensive pre-Tesla finance background that demonstrated his knowledge. Another former colleague at Ford was a Director of Accounting, which again demonstrated his knowledge and led to senior accounting positions outside of Ford.

7) For whatever reason, the CMA credential does not seem to be held in as high a regard as the CPA credential. Objectively, those in the CPA societies tend to earn more than those in CMA groups. While I can't speak to the CMA exam, I do know that the pass rate for each of the four parts of the CPA exam is about 50% -- which limits the field and forces people to put in a lot of effort.

8) If I couldn't have become a CPA, I would have become a CMA because in some cases it may have been an adequate substitute when the position said "CPA required".

9) If you know accounting, on-line graduate-level accounting courses are very easy. I had to do 15 graduate units of accounting work (5 courses) to complete the requirements for certification. I found that I worked no more than 35 to 40 hours per course (and got 4 As and 1 B).

10) It may be much easier to obtain CPA certification in a different state (depending on your background and your state's requirements). Unless you want to practice in your state, out-of-state licensure provide the same TLA that quickly communicates your status.

Jeff Durbin
Title: Chief Financial Officer
Company: F. Gavina and Sons, Inc.
(Chief Financial Officer, F. Gavina and Sons, Inc.) |

EXCELLENT points here except I will quibble with #7 a tiny bit. The CPA is the gold standard but it is an auditing certification and the CMA is more appropriate for the corporate world. I would rather hire a CMA than a CPA in many cases. The pay disparity is basically gone.

As for #10, this is an obscure and important point. The CPA is NOT the same in every state and in some states they have adapted it to be more of a generalist certification because of competition from the CMA.

Unmentioned is that in most states you are required to have 2 years of work experience in public accounting or under a CPA to get the license. CMA requires 2 years of 'relevant work experience'. That may make all the difference in the world given your current work situation.

Anonymous
(Accounting Manager) |

There are many CFO's out there without a CPA. I know of one who runs a $70M a year company. If you have a strong financial analysis, investor relations, and operational background you should be fine. You will need to either hire or outsource your technical accounting work though. Look for a very strong technical Controller to compliment you.

Jeff Durbin
Title: Chief Financial Officer
Company: F. Gavina and Sons, Inc.
(Chief Financial Officer, F. Gavina and Sons, Inc.) |

Lots of great advice here so I am not sure my post is needed but I will make it anyway.

1) Being CFO of a firm 'in a few years' is completely unrealistic unless it is a small or start-up firm. You want to excel at it and not just have the title.
2) I agree with Kate that although the CPA is the gold standard, the CMA is much more applicable to the corporate world. You will have to take some accounting classes (or the MBA) to get competent enough to pass it. When I first examined it 25 years ago, I skipped it because it was a bit of a joke. That has changed. I eventually got it about 10 years ago.
3) As for the CFM, it is brand new and doesn't have credibility yet. No sense in wasting your time.
4) I agree with James Scott that there are now some very credible affordable online MBAs (Indiana comes to mind). However, you have a world-class business school (UT Austin) in your back yard. In-state tuition is pretty reasonable. An MBA will be a great complement to your engineering undergrad. The key when evaluating schools is their strengths. With your undergrad in engineering and your stated interest in finance you might want to focus on finance plus either business analytics or operations management. That gives you a broad generalist capability that someone like me lacks academically. If you are lucky, you might be able to enroll in a class for this fall term without matriculating and then roll it into a degree. That gives you a chance to get started right away and get your toe wet before committing.
5) GET A MENTOR. There are plenty of controllers and CFOs out there that are incompetent because they were not properly mentored. Certifications and degrees are great but being properly mentored makes all the difference. See point #1 above.

Mark Sutherland
Title: CFO
Company: Profit By Design CFO & Controller Servic..
(CFO, Profit By Design CFO & Controller Services) |

Jon, Whether you decide to go the "self-taught" route or the formal degree route, check out Steven Bragg's web site (co-author of Wiley's GAAP book). I have a bookshelf full of his works which have served me and my teams immensely over the years.

Jon Placa
Title: Director of Finance and Operations
Company: NarrativeDx
LinkedIn Profile
(Director of Finance and Operations, NarrativeDx) |

Thank you for this recommendation - definitely will use this in the near future!

Ben Murray
Title: Vice President and CFO
Company: Cartegraph
(Vice President and CFO, Cartegraph) |

Great discussion here. I have my MBA and then later earned my CPA to learn more about accounting and prepare myself for a CFO role.

Here's my test as to whether you need a CPA.

If you are going to be a CFO of a company with no controller, you need a CPA. You will be approving the entries, creating entries, researching technical accounting matters, dealing with auditors, tax authorities, and on and on.

If you will have a strong controller or experienced accountant to rely on, then you can probably get by without but I'd still recommend it.

BTW, I don't think you need 150 accounting hours. I believe the 150 refers to how many undergraduate hours you have.

Even after the CPA, the only way to feel comfortable and competent with accounting is getting hands on experience.

Patricia Donohue
Title: Managing Director
Company: Gocruit
(Managing Director, Gocruit) |

It depends very much on the size of the company and complexity of the business transactions.ie: manufacturing is much more complex than a service environment. CFO at a small private company acts more like a controller, assuming they are not raising capital, and is a much different role than a CFO at a public company. However, with that being said, as Mark mentioned, without an understanding of how the financials are put together, how will you determine if the numbers are accurate, specifically B/S items like accruals and deferrals. How do you manage a team of accountants without a basic understanding of how they run the G/L? As a CPA and a previous controller, I worked with a CFO/COO who did not have any financial background and the communication was challenging at times because he wanted to shortcut processes and failed to understand/appreciate the detail that is very much a part of the accounting process to produce one accurate set of monthly financials. At minimum, enroll in some financial accounting courses as well as a managerial accounting course. Best of Luck!

Topic Expert
Scott MacDonald
Title: President/Owner
Company: AlphaMac Resources, Inc.
(President/Owner, AlphaMac Resources, Inc.) |

I am about to rain on the parade.
What if I would like to be a brain surgeon, do you think I need to get my MD or DO and go to all that extra schooling and internships? I think I can do a really good job just by doing some OTJ training and reading some books. I have always liked the medical dramas on TV and learned a lot of terminology watching them.

How can you be a CFO without an understanding of accounting pronouncements or the proper accounting education. Debits and Credits are boring, but they are the basis for understanding the profession as well. Auditing, Business Law and Taxes are also important to understand. A CPA certificate and requisite working experience, in my view, is the only way you can be a complete CFO. Put your time in and become a CPA. I know it is tough, but there is a reason it takes so long to do it.

I have run into many "CFOs" in my lifetime that aren't CPAs. They were mediocre at best. Some were downright dangerous to their companies because they didn't have the length and breadth of experience to be a complete CFO.

Finally, experience also makes a "true" CFO. It is impossible to be 25 years old and be a complete CFO. That is a tough thing for many millenials to understand, I know.

Jon, I know it is exciting to have the title CFO. But you are not doing yourself or your company any good by pretending to be one without the proper background. In my experience, companies that hire unqualified CFOs don't really understand what a real CFO does and they don't understand or appreciate what a world class accounting and finance function can do. There are so many things you don't know, and that will ultimately effect your company, probably in a negative way.

Don't hate me for telling the truth.

NoOne InParticular
Title: Owner
Company: None
(Owner, None) |

@Scott: I worked for 12 years without any college education or certification and I knew a balance sheet, profit and loss statement and general ledger like the back of my hand. I worked my way up to department head over 20 staff accountants with degrees. Experience and "street smarts" in accounting can go a long way. No need for a degree if you have a brain sorry. While I do have a degree now I didn't really need it to get to the level I obtained all on my own by listening and paying attention to people who mentored me along the way. With that said I also worked with people in my time in corporate America that had their MBA and were CPA's with far higher education than I had that literally couldn't find their way from the coffee machine back to their desk without a detailed map.

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