As an individual with allegiance to a career in finance, then you may be interested in working as a financial manager. With the right combination of education, experience, and skills, success and job satisfaction is highly achievable. That is to say, there are certain steps to becoming a personal financial manager for an organization, and it’s important to learn so you can plan how to approach making a career in this role while earning a salary. To help you we have compiled the necessary 10 roles and functions of a financial manager you need to know.
Overview
A financial manager is responsible for managing the finances of an organization. They ensure the organization maintains adequate cash flow and liquidity through budgeting, accounting, and financial planning. Financial managers also prepare reports on how well the organization meets its budget goals. Typically, the primary purpose of a financial manager is to maximize the value of an organization’s investments and ensure that financial resources are used in the most effective way possible while earning a salary.
How To Become a Financial Manager
One of the biggest challenges for organizations is finding out the best way to maximize profits. Executive leadership teams often rely on financial managers to create reports and perform financial analyses before making business decisions. So, if you are planning to become a finance manager, here are the steps.
#1. Complete High School
A high school diploma or equivalent is the first step toward becoming a financial manager. As employers require a minimum of a bachelor’s degree in a finance-related field, consider completing business and economics courses, as well as varying math classes.
#2. Acquire a Bachelor’s Degree
While having a degree in finance, accounting or economics will provide you with more relevant finance knowledge, a bachelor’s degree in business is also useful. A business or finance degree will offer classes that help students learn how businesses operate and teach them the important analytical skills they need to succeed in a finance career.
#3. Engage in an Internship Program
A degree will brace you with theoretical knowledge. To start your professional journey, a finance-related internship would be helpful. You can enroll in internships while pursuing your degree as well.
#4. Acquire Certification
It is not compulsory, but a certificate in some specific areas of finance is an added advantage. To choose the best certification to pursue, research more about the requirements to sit for the exam and what career path is best served by the certification. This is because certifications help increase your expertise in a subject, further showcasing your preparation for a career in finance.
#5. Earn a Master’s Degree
You may also opt to get your master’s degree in one of these fields, which in turn makes you more equipped for your chosen career and qualification for a variety of positions. By earning a master’s degree, you’re showcasing your advanced knowledge and proficiency in important subjects for the industry.
#6. Acquire & Advance Your Skills
Taking financial courses to gain additional knowledge can help improve your chances of getting a job as a financial manager. With a wide range of responsibilities, financial managers must have the appropriate skills to handle various tasks. Along with being conversant with numbers, a financial manager will need the following skill sets to advance to more senior positions for higher salary,
- Written and verbal communication skills to explain complex financial concepts
- Analytical skills
- Close attention to numerical detail
- Strong foundation in international finance
- Organizational skills
- Problem-solving:
- Quantitative skills:
- Management
What are the 10 Roles and Functions of a Financial Manager?
There is a wide range of financial management responsibilities to look at when you are considering a job in this area. Different industries sometimes emphasize one responsibility over others, so make sure to research each job opportunity. Financial managers oversee some of the most important aspects of a company’s financial health. Here are 10 roles and functions of a financial manager:
#1. Collecting and Reviewing Financial Information
One out of the 10 roles and functions of a financial manager is to offer informed advice and make accurate decisions regarding the finances of a company. They do this by collecting, filing, and reviewing financial information about the organization.
#2. Envision Trends
Predicting future market and financial trends is a key role for a financial manager. Accurately predicting emerging trends may help a company minimize negative results or exemplify positive ones. Professionals working in this field can see trends emanating by studying financial information and staying updated on financial news.
#3. Working with Management
Financial managers work with management to ensure they are accurately informed about financial decisions. After collecting and reviewing financial data, financial managers may present this information to decision-makers within the company.
#4. Minimizing Financial Risk
There is a certain amount of risk attached to financial decisions. Financial managers assess the risk of financial decisions and measure their potential effect. This helps them see if they’re within certain risk parameters.
#5. Distribution of Profits or Surplus
The financial manager decides how much to retain for plowing back and how much to distribute as dividends to shareholders out of the profits of the company. The factors which influence these decisions include the trend of earnings of the company, the market price of its shares, the requirements of funds for self-financing future programs, and so on.
#6. Establishing compliance
Every country has a wide variety of different tax rules and regulations. A financial manager oversees the compliance of the company at which they work. Here are some tasks this might include:
- Managing salaries
- Filling taxes
- Maintaining industry compliance
#7. Understanding Capital Markets
A clear understanding of the capital market is an essential function of a financial manager. For example, when securities are traded on stock exchanges, there is always an inherent risk that comes with it. That means finance managers need to be able to calculate and measure these risks for themselves to mitigate them as much as possible before proceeding with any investing decisions.
#8. Raising of Funds
To meet the obligation of the business it is important to have enough cash and liquidity. A firm can raise funds by way of equity and debt. It is the responsibility of a financial manager to decide the ratio between debt and equity. It is important to maintain a good balance between equity and debt.
#9. Implementation of Funds
The funds procured by the financial manager are to be prudently invested in various assets to maximize the return on investment: While taking investment decisions, management should be guided by three important principles, viz., safety, profitability, and liquidity.
#10. Managing Documents
Financial management involves the creation and maintenance of many documents. This includes:
- Developing a company’s master budget
- Writing reports
- Using technology
What are the 6 Types of Financial Managers?
Financial management is a broad field, and there are several different types of financial managers. Some of the most common types of financial managers include:
#1. Corporate Finance Managers
Corporate finance managers work in corporations and are responsible for managing the financial resources of the organization. They oversee financial planning and analysis, investment management, and risk management.
#2. Investment Manager
Investment managers work in investment firms, banks, and other financial institutions. They are responsible for managing investment portfolios, analyzing market trends, and making investment decisions that maximize returns for clients.
#3. Risk Managers
Risk managers work in a variety of industries and are responsible for identifying and managing potential risks that could impact an organization’s financial health. They develop risk management strategies, monitor financial performance, and ensure compliance with regulations and laws related to risk management.
#4. Financial Controllers
Financial controllers work in a variety of organizations and are responsible for overseeing financial accounting and reporting. They ensure that financial statements are accurate and comply with accounting standards and regulations.
#6. Treasury Managers
Treasury managers work in corporations and financial institutions and are responsible for managing the organization’s cash and liquidity. They oversee cash flow management, manage debt and financing, and manage relationships with banks and other financial institutions.
#6. Branch Managers
Branch managers oversee the operations of a branch office. This includes hiring employees, approving loans or credit lines, assisting customers, or developing a relationship with members of the community to help increase business. Branch managers also meet with other company executives to discuss current and future financial objectives.
What is the Difference Between a Financial Manager and a Financial Analyst?
A financial manager is solely responsible for the financial direction of a company or an organization, whereas a financial analyst analyses the financial data and formulates the plans for the company accordingly.
Personal Financial Manager
Managing personal finances has become more effective in recent times. This is because it is not restricted to investment and budgeting anymore. A personal finance manager offers ways to manage your money better and chalks out plans to help you achieve your financial goals. Also, a personal finance manager is someone who has mastered the skill of customized and personalized financial management. Thus, they are professionals who guide you on how to manage your money. This includes planning your investment, expenditure, insurance, and tax strategies. This is done by reviewing your current financial health and curating a plan to help you meet your financial goals.
What Does a Personal Financial Manager Do?
The job description of personal finance managers is a lot more complicated than what it appears to be at face value. They take up multiple tasks to thoroughly study your financial needs and develop the best possible plan.
Tips for Choosing the Best Personal Financial Manager for You
Choosing a good financial manager assists you to avoid these costs and focus on your goals. Financial managers aren’t just for rich people, working with a financial advisor is a great choice for anyone who wants to get their finances on track and set long-term objectives. To find the ideal financial manager for your requirements, Here are tips to help you choose a trustworthy personal financial manager you can rely on.
- Evaluate your financial needs
- Understand the different types of financial advisors
- Learn what a financial advisor does
- Know the cost of a financial advisor
- Research financial advisors
- Walk away if it doesn’t feel right
- Choose a financial advisor who keeps you on track
- Check their credentials
Financial Manager Salary
The national average salary for a financial manager is $103,264 per year, although depending on where you live, you may realize a different annual earning. For example, financial managers in San Jose, California, report making an average of $120,261 per year, while those in the same position who live in New York, New York, report annual earnings of $96,619 per year. Your experience level and education may also affect how much you make in this role. As part of your compensation package, you may receive these common benefits from your employer:
- Tuition reimbursement
- Health insurance
- Paid time off
- Parental leave
- Employee discount
- Professional development assistance
- Dental Insurance
- Employee assistance program
- 401(k)
- Disability insurance
According to the U.S. Bureau of Labor Statistics, the job outlook for financial managers is positive, as the agency expects this role to grow by 17% through 2031. This is much quicker than the average for all other careers, and the statistics bureau anticipates 71,300 job opportunities in this field each year. The bureau credits this increased demand to the economy’s continued growth, and it notes a potential for more opportunities for those who specialize in risk management and cash management.
Best-Paying States for Financial Managers
The states and districts that pay a financial manager the highest mean salary are,
- New York $206,990
- Delaware $191,020
- New Jersey $186,890
- Colorado $174,890
- District of Columbia $174,220
Is Accounting and Finance Managers the Same?
An accounting manager focuses on the day-to-day financial aspects of a company’s finances, whereas a finance manager focuses more on long-term planning and risk management.
Is a Finance Manager Higher than an Accountant?
Finance managers typically complete more big-picture tasks and make high-level decisions that can impact the overall performance and financial status of the company, which is why they usually earn more than accounting managers.
Who Does a Financial Manager work with?
Financial Managers work with different departments and leaders throughout an organization. Typically, they work with the Head of Finance to set financial goals and evaluate its financial performance. They can also work with Finance Controllers and Financial Analysts.
References
- indeed.
- .careerexplorer
- forbes
- Ramseysolutions
- resources.workable
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