How Much Do You Know About A Financial Manager?

Meta: The term “Financial manager” is no stranger in the business. Everyone sees it as a great position. But in fact, is it true or not? This article will answer you.

Introduction 

When it comes to organizational success, we can not skip the crucial role and the contribution of the financial manager. This job title is an important position and has a strong influence on business decisions and business development.

Financial manager is a pivotal role in any firm – Image source: Pxhere

In addition, this profession also offers high income and the opportunity to climb up the career ladder and upgrade personal life. We surely can say that you are extremely curious about this occupation until this point.

So, stay tuned for an in-depth look at this job position!

Basic Information About Financial Manager

To kick off, let’s learn two fundamental things about this position beforehand. 

What is a Financial Manager? 

The financial manager is the head of the finance department in enterprises. Managing and controlling all financial activities in the business belong to this job’s responsibility. Also, they carry a great obligation in operating the main department that determines the success or failure of the company.

The financial managers play the key in deciding to deal with business issues. Plus, they evaluate and lead the company’s business activities. 

Various skills and knowledge are required for this position – Image source: Pxhere

Therefore, these people must be capable of professional knowledge, management skills, and cooperation with colleagues as well as show rigorous discipline and responsibility for work.

Apart from that, having a top seat in this department certainly brings a high income for you. Moreover, the opportunities to boost relationships and collaborative partnerships are wide open for you.

However, it is not a piece of cake to take up this highest position. You must have deep insights into finance and some skills in other departments such as accounting, trading, banking, etc. 

How Important A Financial Manager Is?

Financial managers can be considered as a bridge in the company’s operation chain. 

They are mainly responsible for all matters surrounding its finances and budget. In addition, developing long-term plans and strategies to promote the growth of the company’s budget are all under their authority. 

To be more detailed, they have to do a lot of research concerning the financial market and carefully analyze a huge amount of data. Then, it’s their duty to consult on financial-related issues and become a mentor to the executives in making development decisions for the company.

A huge amount of data is analyzed to strategize effectively – Image source: Piqsels

Moreover, they also suggest several durable financial development strategies for the company. If one of the plans is acceptable, they will be directly involved and oversee to promote the development of the company’s budget.

As such, they contribute to helping companies achieve higher business efficiency.

With various roles in an enterprise, a financial manager can apply to many companies in different sectors. Specifically, the fields related to money and finance, such as insurance companies or banking, are extremely appropriate for the post of financial manager.    

Functions Of Finance Manager

  • Estimating the required capital
  • Determine the capital structure
  • Selecting the source of capital
  • Raising capital
  • Proper use of capital
  • Allocating profits or surplus
  • Cash management
  • Financial control

Detailed Description Of Finance Manager Job

A few years ago, financial managers normally functioned as financial supervisors for organizations; now, their role has leveled up. They are currently in charge of financial analysis and advice for the managing directors. Thus, those directors can find the best innovative ideas to maximize profits.

To execute that crucial mission, they often need to team up and work together. The group members must be talented and get along well with each other to achieve successful plans. Together, they analyze and make precise predictions based on real data. 

From there, financial managers will present the final results and consult with the executives to pick out the most optimal choices. For that reason, this complex job requires a rigorous recruitment for the sake of the whole enterprise.

Multitasking is essential as the head of the financial department – Image source: Piqsels

In the following parts, we will show you full specific daily activities that a financial manager has to deal with:

Thoroughly Inspect And Supervise Financial Activities

They ensure that all the financial work follows legal regulations and does not make mistakes that adversely affect the business.

Oversee The Preparation Of Financial Statements

The monthly, quarterly, and annual financial statements are all paperwork for a financial manager to supervise. Simultaneously, they develop financial plans and make financial forecasts for the next business period. 

Regularly checking financial statements – Image source: Pix4free

The financial manager must regularly manage the employees who are responsible for preparing financial statements, thereby reducing error or fraud.

Research And Analyze The Previous Financial Statements Of The Enterprise

By conducting this research, they may find out about existing financial problems. Effective measures will then be prepared to increase financial performance and reduce costs.

Constantly Catch Up With Current Market Trends.

After analyzing and monitoring market developments, FM will make accurate predictions and catch market bandwagon in time. Consequently, the business is open up with opportunities for further expansion.

A Productive And Creative Consultant

It’s the FM’s duty to give the CEO and senior managers some useful advice in making important business decisions. As a result, the business will grow stronger than ever.

Offer useful suggestions for enhancing the company’s growth – Image source: Business Yield

Distribute Assignment Reasonably

The next task is to assign jobs for employees in the department, such as prepare income statements, income analysis reports, and make forecasts about the financial situation and costs in the next business period.

Collaborate With Other Departments

Coordination with accounting department staff and subordinates is inevitable for an FM to reasonably analyze, calculate, and allocate the company’s budget. 

Also, they make sure the business has enough financial spectrum to meet future needs. Besides, the financial manager needs to find an effective plan to increase capital for the enterprise.

Manage Credit Activities Of Enterprises

As an FM, one has to regularly check and monitor credit operations. They also have to monitor the business’s credit rating and supervise credit accounts.

Monitor And Control Cash Flow

Monitoring and controlling cash flow are necessary for any business, which can be implemented by the financial manager. This activity ensures there is enough cash needed for daily operation and payment needs.

Control cash flow to operate business in a smooth way – Image source: Pixabay

Manage The Financial Risks Of The Business

A financial manager is in charge of managing the financial risks of the business. Specifically, they will use appropriate measures and strategies to minimize financial losses.

Moreover, it’s advisable for them to keep track of money and commodity price fluctuations because these changes can have an unpredictable impact on the economy of one or more countries.

Minimize The Damage Caused By Financial Risks

They do this mission by purchasing insurance packages suitable for the business. Some examples include insurance for lawsuits or an insurance package for employees if an accident occurs during work.

Some Facts About A Financial Manager

Various Work Environments For A Financial Managers

In any organization, it is vital to build up and solidate a safe and solid financial system for the smooth operation of all other departments. Besides, strategies from the head of the finance department are also extremely supportive to set the stage for the company’s development.

As such, a multi-functional position of financial manager can work in a wide range of different sectors.

Diverse working environments – Image source: Flickr

First and foremost, they can pursue financial careers in profit-making enterprises. These companies vary in many industries, including investment firms, banks, brokerage companies, dedicated financial services, insurance companies, and many other small profitable organizations.

Nonprofit organizations also welcome a FM, as they need a firm financial structure to operate effectively. Otherwise volunteer services organizations, labor unions, legal aid societies, public clinics and hospitals, museums, and other administrative agencies are other ways to go.

Away from that, they can also apply for that vacancy in public organizations in charge of public funds. In these institutes, FMs can help carry out effective implementation processes for financial management and service delivery.

For instance, they can work in the District-level Tax Department, State Treasury, or Department of Transportation.

High Wages 

In 2019, working in the financial manager position can earn $129,890 annually, and the number has jumped to $131,710 in 2021 (BLS). 

Earning an ideal income from the financial manager seat – Image source: Pxhere

This high position also reached no.16 in the list of Best Paying Jobs in 2021 (according to the annual report of U.S. News & World)   

Positive Job Perspective

Last year, as per a statistic carried out by the U.S. News & World, the financial manager job title was on the top of the best careers list. Specifically, it earns a number 3 slot out of best business jobs and 17 out of best 100 jobs. That was a brilliant ranking in the current job competitiveness market.

It is estimated that employed financial managers will rise by 17% in the next decade. This increasing speed may seem faster than the median point of all other occupations.

In other words, the job opportunities for financial managers are widely open to financially passionate workers. 

Job Contentment

Statistics show that the satisfaction rate is relatively high in the USA. On average, Americans can work at this position until they turn into their 50s or 60s. That means they find this job flexible and delightful with rather low pressure.

Additionally, many promotion chances are on the table to progress and reach a higher position. By then, you can easily earn a more lucrative payment and feel free to enjoy all the wonderful experiences in your life.

Is It Hard To Become A Financial Manager?

Qualification Requirements

In terms of qualifications, the requirements are extremely strict. It would be best if you surely got a bachelor’s degree in finance and some related majors such as economics, accounting, or business administration. 

In addition to a specific certification, you also need to have a long period working in the financial industry. In particular, experiences of 4 or more years can help compete for the highest position in the field.

Skills Requirements

The ability to analyze and strategize effectively is one of the first important factors. The precise analysis of trends may result in accurate predictions. Also, a well-organized strategy can allow the company to thrive on the right track. 

The possession of a good vision will be the next step to being a pro in a finance major. This skill seems like a key element in making a financial manager more outstanding than any counterpart. A good vision enables them to give reasonable forecasts regarding business chaos in the future, thereby avoiding risks or misfortunes.

A good vision will assist this job greatly – image source: c.pxhere

Proficient use of analytical software must be a compulsory condition in the financial industry. We do not have to say much about this skill as you can not become a financial leader without it. This kind of software allows you to make forecasting more accurate and valid.

The next skill is to negotiate at work efficiently. This negotiation skill helps you bring high-profit projects to the firm. At the same time, the subtlety and ingenuity in dealing with partners also help you score points in the eyes of the company’s boss.

Continuously enriching the knowledge of trade and business is a powerful weapon. Then, you could apply that acquaintance to strategize and analyze financial data more successfully. As a result, your advice on financial allocation for business activities is more accurate and closer to reality.

Last but not least, you must have management and time allocation ability. It enables you to assign tasks with appropriate periods for employees with no trouble.

Occupation In Relation To Financial

Suppose you have a desperate passion for finance but cannot become a professional financial manager. There is no need to worry as there are several other promising ways to work in the financial industry. 

These are some ideal job choices for reference:

  • Accountant
  • Auditor
  • Budget Analyst
  • Financial Analyst

In Brief

Becoming a professional financial manager may be the all-time dream of many finance lovers. 

However, pursuing that dream is not as easy as solving a math problem. You need to acquire all the strict requirements and skills before officially stepping into that zone.

But we strongly believe that you can do it because you have been following us until the very end of this article. You have proved that you are focused on what you are chasing.

Also, we hope this article may be a handbook accompanying you on the way to reach the head of the finance department.

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