What is a financial manager?
Individuals that keep a check on activities going on in the organization, direct the operations, plan the goals and develop strategies for the company. They produce financial reports before the executives and make the organization executives understand those reports. All the work starts from ground-level activities in the organization until the financial manager supervises the final report.
Therefore these managers must have good sound knowledge about:
- International finance.
- Instruments of the capital market like U.S agency securities, corporate bonds, and mortgage instruments.
- Instruments of money market like promissory note, Treasury bill, certificate of deposit, etc.
The working of these instruments, the period of hold, price speculations, and the marketability. These all things are necessary for managers to handle because the dealings are based on these instruments. The financial managers are always looking for a profit of the organizations and maximizing the profit by either way- reducing the costs, diversification, expansion, or any other way out. They also advise other senior executives about any discrepancy or any adjustment that is needed.
We are always looking for a job that can make a significant difference in our career in promotion, learning new skills, diversifying into different projects, and keeping the day-to-day task thrilling and exciting. Therefore this field is best for an exciting career. There are new opportunities every day, where you have to figure out things independently and fulfill the requirements of those opportunities.
Though this excitement comes with a lot of stress, your stress handling capacity also increases over time as you get new and new responsibilities. A survey in which the retired financial managers were asked about their life if they were satisfied with the job or not and most of them praised their life that their life was pretty interesting and fulfilling. So all these challenges that you face today become a part of your great story.
How much do financial managers make?
The salary range varies from region to region. There is a different amount of salary in a different region. However, if we talk about the US, the financial managers are paid decently by the organizations. This is quite a decent career to pursue. As explained above that, the responsibilities are quite huge. Therefore the pay is also quite huge.
Also, it depends on the experience of the individual. If you are a fresher, then the salary you get will be lesser because first, you need to acquire the required skills. For that, you need to work under someone already working in that field and understand the work to glimpse the field. Now the starting salary for a fresher could be around $60000 also, and for an experienced professional it may go as high as $190000.
On the other side, if the individual is experienced, they will be paid more based on their expertise how much they can benefit the organization. But there is one thing: the average salary in this field is also quite above the highest salary of any other field or profession. For example, financial managers, on average, make around $130000 yearly. So the scope of salary and promotion in this field is quite high. So if you gather and build on the required skills and expertise, you can easily climb up the corporate ladder and make a decent amount of money while also getting promoted in the organization.
Suppose we talk about the hours of work to be put in the field, then a financial manager, on average, puts 40-45 hours of work in a week into his job. The work is quite hectic, we have to deal with people all day and convince them of the project we are offering, and therefore one must possess good communication skills if they want to pursue this field. Also, these skills can be developed over time, but the condition is that you must be willing to grow over time.
Types of Financial Managers
Now financial managers also have many types. These all managers have a different set of responsibilities to fulfill where the role of each and everyone is different.
- Controllers: There are various departments in an organization that perform their own duties and work and the final report of that department is sent for analysis to the controller. So the controller will determine the position of that department on the basis of that report seeing the expense and earning statements.
- Finance Officers: They are required at the time when the company is planning to invest somewhere or at the time of merger- acquisition. They keep the track of the value of an investment and return on that investment.
- Credit Managers: They are required at the time of credit assessment. They set the criteria of credit and also take care of the return on that credit.
- Cash Managers: The inflow and outflow of cash from the organization is taken care of by the cash manager. The future use and requirement are taken care of while also managing the present requirement related to investment.
- Risk Managers: They develop the strategy of how to reduce financial uncertainty. The probability of loss can be reduced and how to get up from that loss situation.
- Insurance Managers: There are many accidents happening in the company due to which the compensation is paid to employees. Such incidents are taken care of by the insurance managers to lower the company’s cost.
How to become a financial manager?
SKILLS REQUIRED FOR FINANCIAL MANAGER
- These are skills that are required by the individual apart from the classroom or social skillset.
- The skills are developed by practical training and exposure in the real world where you get to learn a lot about the working of this profession.
- For this skill, you need to work under a manager as his or her assistant or associate so that the required skills are built and developed and later on they can be harvested.
- The experience certificate you obtain from the main manager will help you in getting the job or getting placed in the real world. This is because you will gain practical work experience.
EDUCATIONAL QUALIFICATION REQUIRED
- A bachelor’s or master’s degree is required to start this profession because this degree gives you a brief overview of the profession, not the whole idea but a basic idea with which the career can be started from scratch.
- The degree can be pursued in accounts, economics, business administration, or finance. This is because these specializations are more appealing to the recruiters.
- Also, you can display the projects you have worked on during academics. The experience also counts. There are some fields like financial planning, security analysis, and management which one can specialize in or pursue a course in apart from regular studies, this will show your interest in the field.
SOFT SKILLS REQUIRED
- Communication Skills – As specified that you would be required to communicate with a lot of people on a daily basis, therefore, it is very necessary to communicate effectively and talk with people to convince them of your idea. This cannot be done without getting to understanding the person and figuring out his or her requirement.
- Analysis Skills – You need to analyze the reports and make decisions based on the daily. There are various departments whose reports are to be analyzed so that the performance can be judged and necessary action can be taken.
- Problem-Solving Skills – As you know that this is a very stressful field where there are both technicalities and relationships. Any problem arises anytime therefore you must be very aware and conscious of your actions so that problems can be solved as soon as they arrive.
- Investigation Skills – Analyzing the data and taking the decision on the basis of numbers is the key role of a financial manager so the math skills must be good, the investigation process might be time-consuming and stressful.
- Organizational Skills – Your time and energy must go to activities that need priority. All the tasks must be prioritized in order to carry them out efficiently.
Roles and Responsibilities of a Financial Manager
DUTIES OF A FINANCIAL MANAGER
- Keeping a check on financial reports prepared by various departments of an organization so that they can be optimized according to the objectives to be achieved by the company.
- Writing down goals to be achieved and creating a strategy to achieve those goals. This is known as the development and interpretation of finance.
- Assessing the investment opportunity for increasing the revenue and decreasing the costs. To understand the return on investment that will come to the company and in how much time the capital will be recovered.
- Increasing productivity by motivating employees to work smartly so that they can be good for both organization and their career. Any company likes to hire exclusive talent so that they can grow at a faster rate.
ROLE OF A FINANCIAL MANAGER
- Forecast the financial position of the company and take necessary steps, sometimes the activities of a plan need to be changed if something is not going as per prediction. In that case, we need to be flexible and adaptable.
- Assisting the employees and provide a better understanding of the plan, if employees are facing any problem or issue related to the plan then that issue should be immediately solved to get back on track.
- Being aware of the opportunities and threats prevailing in the market because competitors also sometimes try to prove a threat in the way ahead, and also there are many opportunities that arise in our way which should be grabbed in order to get the first-mover advantage.
- Being a mediator between employees and the management, all the efforts of employees must be recognized and discussed with the management so that they are well rewarded and kept satisfied.
The main role of a financial manager is to look after the company’s finances, that they should not go in vain. Also, he should keep a check on the advancements happening in the industry, whether technological advancements or any other changes that might change the way of living. Major transformations include the changes that can save people’s time and effort, and we need to adapt according to that.
In today’s time, apart from all this, the other requirement is data analysis where all the reports are presented in front of the manager, performance is analyzed, and necessary feedback is provided to the department head if any improvements are needed in the functioning.
Future Prospects or Opportunities in this Field
There are many opportunities in this field if you specialize in one or the other field. However, you must have a sound knowledge about a subject by which you can effectively contribute towards management and growth. Therefore, recruiters look for competency, efficiency, and determination while selecting a candidate.
But apart from that, if you certify or specialize in something or some course, then this might prove beneficial and keep you ahead of others in the competition. Some such courses are:
- Chartered Financial Analyst: This course teaches you an advanced level of finance be it analysis, management or administration. This is a globally recognized course where there are some pre-requisites like a bachelor’s degree or some experience certificate. There are 3 levels which you need to get through. Each level teaches you something different. Also, some companies help their employees get promoted in the hierarchy if they find the talent useful. They sponsor the education for that employee so you can develop your skills and then contribute more to the organization.
- Business Finance Manager: These managers are good with handling money, making budgets, and investing money at appropriate sources. There is a time when we need to optimize the resources available to us so that the best use can be made of them. This can be done after optimal analysis of the reports and suggesting necessary changes to the plan.
- Accounting Manager: The accounting skills of the candidate must be good enough so that he can maintain various documents like income and expense statements, balance sheets, and other documents also. There is a lot of competition in this field and also a greater than average level of competence is required for clearing this specialization.
All these specializations and courses are like icing on the cake where they add up to your skills, and you can improve your selection percentage drastically. There are many job openings in this sector because of the people who change their jobs and the ones who get retired. The ones who gain the required expertise go on to change the job searching for better opportunities, some build on new skills, some search for better pay and compensation. In addition, there are people in search of learning new skills so that they can change their career or their job prospect.
Demand in the Industry
The main thing you are required to do in this profession is brainstorm different things the whole day. This is because various ideas keep coming up the whole day. Hence, you need to develop a habit of sitting on the desk the whole day, be tech-savvy so that you know how to use computers and other devices, and also have good communication skills so because you have to maintain a good repo with employees as well as the organization executives that is higher-level administration.
- The demand in this industry seems to be increasing as per the trend and surveys done by various sources. The growth varies from industry to industry but according to the experts in the coming few years there will be a huge demand for financial managers because more and more businesses are coming up day by day and expanding their operations and they are believed to expand even on a larger scale.
- So the investment planning needs to be done by every company before they get their money stuck in unnecessary directions and suffer cash shortage. Today more and more companies are becoming global, the trade is increasing day by day therefore all these activities require management, risk assessment, and credit management.
- Also due to technological changes where clerical work is getting to an end and customers are getting the easy facility to operate everything through mobile, there will be a decline in need of regular employees and a rise in need of finance managers. These all transactions need to be managed by someone to keep and maintain the data.
There is a trend seen in the profession that many people leave their job in this field either for changing careers or developing new skills to enhance their prospects.
Some leave the job if they are no able to manage the stress and workload or competition. Also, individuals who have a bachelor’s or master’s degree are better at finding a job because they have a wider field to choose from. They have more opportunities. Plus, if they have a work experience certificate, then this eases out the task for them because now they can display proof of their work if they specialize in something.
On the ending note, it is advised that financial management is a great field to enter with great opportunities for the future. The requirement is that you should have the required skills and qualifications, and the good thing is that the skills required can be developed over time with practice. This is a very responsible field so you should develop expertise. The responsibilities are heavier; therefore, what they pay you to get is also above average. There are many incentives in this field ad also, with the correct skills, you can quickly climb up the corporate ladder. Also, you can specialize in one or the other field if you are passionate about some specific category.
Frequently Asked Questions (FAQs)
- Which is the maximum paid category in a financial manager?
This can be assessed by keeping in mind the roles and responsibilities of each category. There is a different role for each category, some require more time and attention while some require attention to details, and some are more planning-based and not a regular job. As a result, the salaries of different categories are different. However, if we look at the current data and forecast done by the experts, then the risk manager and case manager will be high in demand and pay in the future.
- How do financial managers spend their day?
Most of the day of financial managers is spent in the office on computers and other devices to analyze and prepare the reports. In addition, there is various software which they use to interact with clients. The work is pretty stressful and time-consuming; therefore, the stress management skill of the individual must be good enough. Apart from their own work, they interact with the administration and even the employees. They give presentations in front of their clients and keep everyone convinced.
- Which skills should we develop and why?
There are both academic and non-academic requirements. Academic requirements include a bachelor’s degree in accounts, economics, administration, or finance. Along with it, if you have pursued any course or specialization, then you can add it to your resume. Also, if you have worked somewhere, then an experience certificate will open many opportunities for you. It will be proof that you are experienced and have knowledge about the field. Academics only provide you a brief knowledge, not the whole knowledge.
Non-academic requirements include soft skills like communication skills, problem-solving skills, and management skills. For example, you should communicate effectively with all the people working in the organization, whether they are normal employees or administration executives. Also, the problem that has come up should be solved immediately, and changes should be; made therefore, you should be adaptable and flexible.