Financial Manager CareerMost firms, organizations, and government agencies employ one or more financial managers. They supervise direct investment activities, financial statements and reports, develop cash management strategies, and are involved with planning and implementing long-term company goals.
Depending on their positions, financial managers can have a variety of duties which can include international banking management, insurance management, cash management, credit management, finance officer, treasurer, or controller. Controllers oversee the preparation of financial reports, documents that detail the firm's finances, including analyses of future earning or expenses, balance sheets, and income statements, and controllers are responsible for overseeing the preparation of reports required by regulatory agencies. Frequently, controllers supervise the auditing, accounting, and budget divisions. Treasures and finance officers are responsible for supervising a firm's budget, to ensure it reaches its financial goals. They supervise investment, manage risk, oversee cash management operations, raise capital, and manage mergers and acquisitions. Whereas credit managers develop credit-rating criteria, establish credit ceilings, monitor collections of past-due accounts, and are responsible for determining credit issuance.
Cash managers regulate and supervise the flow of cash receipts and disbursements to meet the firm's investment and business needs. Revenue projections are necessary to determine whether a company needs to obtain credit to meet cash requirements or whether surplus funds should be invested in interest-bearing accounts. Risk and insurance managers supervise risk minimization programs intended to decrease money loss from business operations, as well as supervise the company's insurance budget. Managers responsible for international finance organize accounting and financial systems, designed to support foreign companies' banking transactions.
Commercial banks, credit unions, mortgage, finance companies, and savings and loan associations hire extra financial managers to supervise lending, trusts, investments, mortgages, and other programs including business operations, sales, or electronic financial services. These managers authorize loan requests, invest capital, and generate additional business while obeying federal and state laws and regulations.
Branch managers at financial institutions supervise all branch office functions. Their responsibilities can include loan and line of credit approval, hiring new employees, establishing good community relations to attract new customers, and resolve customer account problems. Branch managers are becoming more involved with marketing and sales, which means they must understand the different types of financial products and services the bank offers. Financial managers working for financial institutions must stay updated with the growing assortment of innovative financial products and services.
Along with the other duties, all financial managers are responsible for unique tasks specific to their industry. To illustrate, government financial managers must understand government appropriations and budgeting, while health care financial managers must understand health care financing. Financial managers must also be informed about special tax laws and regulations affecting their organization.
Financial managers serve a vital role in mergers, consolidations, and global expansion finance. Managers working in the preceding areas must possess expert knowledge to increase profits and decrease risks. These managers are often hired temporarily to consult senior management. Moreover, certain small companies outsource accounting and financial operations.
Because technological innovation is reducing the time required to produce financial reports, the duties of financial managers, especially in business, are changing. Financial managers render more data analysis and discuss their ideas for increasing revenue with senior management. Financial managers need to remain updated on computer technology to improve financial operation efficiency.
Work EnvironmentFinancial managers work in cozy offices near senior management, have direct access to the best computer systems, and work directly with divisions that compute the financial information necessary for these managers to perform their duties. These managers often work 50 to 60 hour weeks, and often travel to meet with financial and economic associations, customers, and other company subsidiaries.
Training, Qualifications and Career AdvancementMany financial managers hold a bachelor's degree while some hold master's degrees or professional certifications. Bank managers often have previous experience as loan officers; while, financial managers should possess good interpersonal and business skills. Financial managers must hold at a minimum, a bachelor's degree in economics, accounting, business administration, or finance, but many employers are looking for candidates with a master's degree in economics, finance, business administration, or risk management. Graduates from these programs will develop analytical skills, understand financial analysis methods, and learn about new technology.
Experienced candidates may have an advantage over candidates with more formal education for some positions, for example, potential bank branch managers. Banks often promote qualified loan officers or other professionals to become bank managers, and some financial managers receive promotion after completing management training programs offered by their company.
Potential financial managers need a variety of skills. One vital set of skills candidates should possess are interpersonal skills. Managers must resolve problems and work in teams, and they must have excellent communication skills because financial jargon can be confusing. Since managers work with numerous divisions within their organizations, it is necessary to understand business fundamentals.
Financials managers must be creative, be problem solvers, and apply their analytical skills to their business. They must also be familiar and comfortable with new computer technology. Furthermore, financial managers must understand international finance because of the growing interconnection of the world economy. Because of this fact, foreign language proficiency could greatly benefit a manager. Managers must have a solid understanding of compliance procedures because of regulatory changes.
Certification and advancement. Financial managers can demonstrate their abilities and expand their skills by becoming professionally certified. The CFA Institute offers individuals the Chartered Financial Analyst certification. Those with a bachelor's degree, meet work experience requirements, and pass 3 exams can earn this designation. The Association for Financial Professionals offers individuals with at least 2 years of work experience and the successful passing of a test on a computer the Certified Treasury Professional designation. Managers with specialties in accounting can earn the Certified Public Accountant (CPA) or the Certified Management Accountant (CMA) certificate. Those with 2 years of experience, a bachelor's degree, and successfully complete four part exam can earn the CMA certificate, offered through the Institute of Management Accountants.
Continuing education is important for financial managers. They must understand changes in federal and state laws, new and complex financial innovations, and the complexity of global trade. Firms frequently provide opportunities for their employees to increase their knowledge and enhance their skills by encouraging graduate study and attendance at conferences associated with their specialty. Credit union, banking, and financial management organizations, with the assistance of colleges and universities, often sponsor training seminars. Employees prepare for seminars by studying at home and then enroll in courses such as information systems, international banking, financial analysis, corporate cash management, budget management, and accounting management. Many organizations will pay some, or all, of the costs necessary for their employees to attend training programs. Experience and leadership ability are important promotion factors, but earning post graduate degrees or certification can speed up promotion.
Since financial management is necessary for business functions, managers who demonstrate competency and a solid understanding of the different departmental operations within their organization are ideal candidates for upper management. Certain managers transfer to new firms and assume positions similar to their previous ones; while managers with pervasive experience money and experience can start their own consulting firms.
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EmploymentIn 2012, there were about 506,000 financial managers. While they work in all industries, 30 percent of financial managers work for finance and insurance companies such as securities brokers, insurance carriers, credit unions, finance companies, and banks.
Job OutlookProjected job growth for financial managers is expected to be equal to the average growth expected for all occupations, but candidates will experience intense competition for job opportunities. Candidates possessing a master's degree or other certification will be more desirable candidates.
Employment change. Expected job growth for financial managers should increase about 13 percent through 2016. Economic globalization and regulatory reforms will expand job growth, increasing employment opportunities for individuals with expertise in finance. With economic expansion, established companies and new companies will increase the number of financial managers they hire. Demand for new bank managers is expected to increase because banks are building new branches to provide banking services to an increasing population, but company downsizing, mergers, and acquisitions will decrease the need for potential managers.
Favorable job prospects for financial managers working in securities and commodities should exist in the future because of the increasing number of investments and the growing complexity of financial transactions. Financial managers will also analyze global financial transactions, assist in capital formation, and manage mergers and acquisitions. Employment opportunities for insurance and investment risk managers will also increase.
Certain companies may hire financial managers temporarily to receive ideas for raising revenue and assistance resolving crises. Even though some firms will outsource their accounting and financial operations, financial managers will supervise these operations.
Job prospects. Managerial candidates will face intense competition because there will be more applicants than openings. Potential managers with experience in accounting and finance, especially those with a master's degree or a certification, will have more job opportunities. Financial managers work with strategic planning teams, so communication skills are essential as well as knowledge of international finance and adequate computer skills.
Branch managers will need to understand new insurance and investment products. Candidates licensed to sell securities or insurance will have better job prospects than other candidates.
EarningsIn May of 2012, median yearly salaries for financial managers were $90,970. The average salaries for these managers were between $66,690 and $125,180. The bottom 10 percent averaged less than $50,290 annually and the upper 10 percent averaged more than $145,600 annually. Median annual salaries with the most financial managers were located in the following industries:
- Depository credit intermediation - $72,580
- Local government - $72,790
- Nondepository credit intermediation - $86,340
- Management of companies - $105,410
- Securities and commodity contracts intermediation - $131,730