Yes! Financial management career is undoubtedly the best job to aspire for if you are looking for secure job prospects with significantly low-stress levels and an increasingly good work-life balance.
Above all, financial managers have the most career options and solid opportunities to progress into management positions where the potential to earn a higher salary is quite high.
According to published reports, Financial Managers’ job satisfaction is rated as the best it has ever been, and the upward trend in hiring, stress level, and flexibility of work only make becoming a financial manager a more prospective career of our times.
About Financial Manager Job Profile
Financial managers are very significant to any type of company these days. With more organizations and government agencies being introduced each year, the need for a financial manager is increasing endlessly.
In fact, some companies go as far as hiring two or more financial managers. This is particularly common in larger organizations. One financial manager is enough for a small organization though. All the same, having a job and securing a lifetime career as a financial manager can come with a lot of benefits.
Are you struggling to decide if this is the right career path for you? Do you have what it takes to be a financial manager? Well, you are in luck. In this article, we will be covering all you need to know about this rewarding career. From the qualifications, skills, salaries to prospects and other retributions.
What is a financial manager?
Every organization needs to have someone who sets up strategies for maintaining money as well as someone who prepares and presents financial information to stakeholders of the company. That’s where a financial manager steps in.
A financial manager is an employee in an organization, whether large or small, who manages the financial division of the business to keep it financially accountable while ensuring that it is goal oriented.
In other words, the financial manager takes care of anything related to the organization’s returns and expenditures.
The financial manager is responsible for rather a lot of monetary tasks in an organization. For instance, he/she oversees direct investments either made to the company or by it. Also, this manager may provide advice to other managers about potential ways of raising income.
From the definition, we know that the financial manager presents financial statements to any interested parties or anyone directly or indirectly associated to the company. This is an essential part of any organization’s info since the financial statements indicate the company’s financial position.
Above all of these elements, the financial manager is responsible for developing long term financial goals of a company. Usually, a company has main organizational goals and departmental goals. The financial manager should ensure that the objectives that he/she set will put the company in a path towards its main business goals. More on the outline of the duties will be communicated about in a bit.
From the few duties mentioned above, we know that financial management is a job that requires a great about of skill. You will need to have a great level of mathematics and calculations. On top of that, you have to know a lot about business, company and country laws in altogether. In this way, you will be able to present information and govern finances in a way that is acceptable by the law.
Also, leadership skills will have to be a must. Typically, all managerial positions require someone who has a higher grade of leadership skills.
Ultimately, a career in financial management will have you in great roles, and with several benefits. Once you have attained a higher qualification and experience, this is the career that can have you in managerial positions, with a higher pay and even greater benefits. My advice: if you want to have more benefits in this career, you should keep upgrading your qualification.
What is this career like?
Unlike careers like business administration which covers a wide range of sectors of a business, a financial manager leans much to the finance sector of that business and makes every financial decision.
Below are the various duties of a financial manager:
- He/she has to monitor all financial details, so as to ensure that they comply with the law
- Supervise workers who do financial reporting and budgeting. These are the lower level finance personnel like accountants and bookkeepers
- Prepare financial statements, business activity information as well as forecast on the future revenue and expenditure provisions
- Help management in making long term corporate decisions
- The Financial manager is also required to analyze market tendencies or trends. This will be done to find profit-maximizing opportunities
Many of these duties may vary depending on the exact expertise as well as the type of financial manager.
Types of Financial managers
Generally, “financial manager” is a general term that encompasses 6 types.
- Credit managers
Credit managers are mainly responsible for overseeing the firm’s credit sector. They are the ones who determine credit limits, set the rating criteria, accept loan applications and oversee collections of past-due accounts.
- Risk managers
These types of financial managers focus on controlling the financial risk of a company. They create effective short and long term strategies in order to limit the probability of a financial loss.
The main aim is that the risk of the company coming into uncertainties is minimized, and if those uncertainties do hit, the company’s finances must be secure to some extent.
Besides this, risk managers work on trying to limit the risks that would affect a company, in times when the price of a commodity or the currency drops.
- Treasurers
Treasures are a very essential part of a company’s survival. Not only are they responsible for creating budgets. They also direct and oversee the organization (as a whole) to ensure that the company is indeed working within the budget.
The main objective of treasurers is to ensure that the costs are minimized, and if at all, the unnecessary ones are avoided altogether.
Also, treasures are specialized in developing financial plans or mergers and acquisitions and overseeing the investment of funds.
- Cash managers
These type of managers are self-explanatory. Cash managers are responsible in supervising and controlling the flow of cash.
In financial terms, we refer to these type of managers as cash flow managers, since they handle the cash going in and out of the company. By doing this, they are able to access the surplus or the deficit that a particular project will have on the entity.
- Insurance managers
Insurance managers and risk managers have a similar job role; they both deal with risks. Their main responsibility is to decide how best to limit a company’s losses. It does this by obtaining insurance against risks.
Insurance may cover a lot of aspects such as the costs levied by a complaint against the company or providing a cover for an employee, in case he/she gets injured or disabled during the job.
- Controllers
Compared to the other types of financial managers, controllers seem to have a lot of work that they need to accomplish.
As an outline, financial managers are responsible in preparing financial statements or ensuring that they have been prepared by an employee. These statements must always provide an overview of the company’s financial position. Here, we are talking about balance sheets, income statements and analysis of future earnings and expenditure.
Besides this, controllers also oversee the preparation of various documents that are either required by government agencies or other stakeholders that have interest in the business. Every so often, controllers will supervise the accounting, audit as well as the budget departments.
Working Environments
Financial managers largely do all their work in their office, which is furnished with up-to-date tools and equipment, since most of their work requires analyzing data.
On the hours, financial managers will work anywhere from 50 to as long as 60 hours per week. As compared to the hours required for other organizational members, be prepared to work for longer hours.
Besides the office environment, most financial managers may need to travel either to meet with clients or to attend various financial meetings around the country or abroad.
General Workload Overview.
Normally, the amount of work done by a financial manager will depend on the size and complexity of the organization itself. A financial manager in a large organization will have a lot of things to do, contrasting the one in a smaller organization. As such, it is always important to do your research on the nature of the business prior to applying for that vacant position.
Compared to most careers, almost every company needs a financial manager. Other careers do not have this kind of market. For instance, a law firm probably wouldn’t need a doctor, but they will most certainly need a financial manager.
For that reason, the market for financial management is very wide, meaning that the competition for this career is large.
Financial managers pretty much like medical doctors are required in banks as well as loan associations. In the part of the industry, they handle various organizational activities like overseeing investments and mortgages. Besides taking care of the finances, they also play an important role in ensuring that the company operates and maintains its status comply to the federal laws as well as state regulations.
On the other hand, some managers overlook financial institutions as branch managers. In this case, they are responsible for all aspects of that particular branch. For instance, they will be required to handle individual as well as corporate loans in accounts, and must track and collect the loans. Overall, they should be advanced in the financial world.
Besides that, they also need to have a vast knowledge of the products or services that are being sold, the type of work done by every department and should coordinate them accordingly. For this reason, the financial manager must possess a great amount of communication skills (which we will talk about below) to both internal and external stakeholders of the business.
Also, some of these financial managers are needed when it comes to merging and consolidations in a particular organization. What do I mean? In most cases, some organizations, let’s take NGOs for example, will require a financial manager that specializes in accounting for Non-governmental organizations.
As such, you will have to be specialized in that particular field for you to land that job. There are certain laws and regulations that only affect that part of the industry.
What skills are needed?
Individuals that are planning to become financial managers should generally have or build the following skills:
- Communication skills
- Analytical skills
- Organization
- Management
- Attention to detail
- Decision-making
- Detail orientation
- Leadership skills
- Problem-solving skills
What is the pay? Salary/ Benefits
According to the U.S. Bureau of Labor Statistics (B.L.S.), financial managers earned an annual salary of $115,320 on average in 2014.
In 2009, the average income a financial manager earned annually was $113,000, with salaries ranging from $72,030 to about $135,070. This clearly indicates how much the market is developing.
The salary of a financial manager will also depend on the size of the organization. It is rather obvious that managers in a larger organization are likely to get paid better than the ones in a smaller organization. It has a lot more to do with the duties and the revenue of the company as well.
Besides the salary, studies showed that many private and public organizations pay additional compensation. This is usually in form of either bonuses, commissions or even stocks.
What is the career outlook?
Because the financial market is wide-ranging, the employment prospects of financial managers are quite good. However, there is likely to be a very tight competition in this sector, since new graduates are coming up in the market every year.
A stiff competition requires you to stand out from the crowd, and what will make you stand out the most? Your qualifications. Applicants that have a master’s degree and a certification are likely to be more successful in this field as compared to the common bachelor’s degree.
A study of jobs in 2018 showed that about one third of financial managers were being employed either by insurance companies or financial institutions. Others were spread between government agencies and private companies.
The differences in the average salary of a financial manager from the year 2009 to 2014 (above) tells us that this market is growing at a considerable rate. The same can be said for other sectors as well.
Since new companies are coming into existence every year, it is likely that the need for financial managers will continue to increase in the future.
What education is required?
When it comes to the education, a financial management position requires you to have at least a bachelor’s degree in a subject like financial management, accounting or business administration.
A research across many job openings showed that nowadays, most employers are looking for applicants who have at least a master’s degree for this role. This is because these higher programs sharpen the applicant’s analytical skills. Furthermore, a master’s degree is becoming preferred among employers of financial managers.
Also, you will need to have some years of experience if you are planning on landing such a prominent management role. With those years, your employer will know that you have some experience of being in a working environment as well as handling various systems. This shouldn’t be hard for you at all.
There are companies that actually provide their own formal management training programs. You can take advantage of these programs to get an insight on how money is handles and budgeted for.
As a tip, I recommend starting off your career by gaining experience through another job in your same financial sector. Try going for occupations such as accounting and loan officers.
Typically, enrolling in financial management program will have you covering courses such as Business Law, financial planning, budgeting, and microeconomics- just to mention a few.
On the other hand, if you go for a Business administration program, you will learn business finance and income taxation and many others
One characteristic that sets the financial manager apart from the rest of the members of an organization is that education keeps continuing, even after you get certified.
This is because new state laws and regulations are continuously being implemented and added to education each year. For instance, tax laws change now and again. As such, continuing education is the key to maintain a job, especially in this financial sector where there is a lot of competition.
Licenses, Certifications, and Registrations for Financial Managers
Although some may consider this step as optional, many financial managers may have the need to obtain a certification or other type of license in order to advance their career and demonstrate a higher level of competence to a potential employer. Let’s talk about well-known certifications.
- Chartered Financial Analyst (CFA) Certification
This chartered financial analyst certification is brought by the CFA Institute. This certification is awarded to applicants who have a bachelor’s degree either in accounting, finance or any related courses, 4 years of work experience and must pass three exams.
- Certified Treasury Professional credential
The Certified Treasury Professional credential is conferred by the Association for Financial Professionals. This superior certification is awarded to applicants that have at least 2 years of experience and have passed to those who pass an exam.
- Certified Public Accountants (CPAs)
Certified public accountants are generally licensed by their state’s board of accountancy. To become certified, they must pass an exam that is mainly administered by the American Institute of Certified Public Accountants (AICPA).