What Does a Financial Manager Do?

Kelly Hernandez
A financial manager showing a businesswoman the financial health of her company through charts and figures.

Financial managers are responsible for creating a company or organization’s financial strategy and assisting executives or stakeholders with fiscal decisions. As a manager, you lead a team of professionals who handle finance-related tasks such as accounting, budgeting, risk assessment, and financial analysis.

Financial managers can work for small or midsize businesses or large corporations or organizations. Your duties may vary depending on the size of the company for which you work.

As well as financial and management skills, finance managers need the ability to communicate with executives and other decision-makers. You are usually also tasked with making vital decisions yourself.

Financial management can be a lucrative career, but you need specific skills, qualifications, and experience to succeed. This career path usually requires that you commit several years to getting an education and gaining experience in entry-level and mid-level positions.

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Financial Manager Responsibilities

The job responsibilities of a financial manager revolve around keeping a company financially healthy in the present and future. In this job, you direct the financial activities of the company or organization, plan short- and long-term strategies, analyze financial data, and produce financial reports for decision-makers. You are also responsible for ensuring that the company operates according to relevant financial laws and regulations.

Specific responsibilities for financial managers vary depending on where they work. In a larger corporation, a financial manager may focus on a specific area, such as risk management or lending. In smaller companies, you may oversee all financial activities.

Here is a closer look at many of the most-common duties of financial managers.

  • Financial managers are responsible for overseeing the production of financial and accounting documents. These include income statements, balance sheets, business forecasts and other projections, cash flow analysis, and budget plans.
  • Financial managers take responsibility for ensuring that the company complies with all applicable laws and regulations. To do this, they closely monitor the business activities of the company, oversee audits, research new laws and regulations, and set internal policies to ensure compliance. If the company has a compliance issue, it is usually up to the financial manager to make the necessary changes to fix the problem.
  • Financial managers supervise employees who do the budgeting, accounting, and reporting work in the finance department. In this position, you usually make hiring decisions for the department and set employee policies.
  • Financial managers routinely review reports and internal data to assess financial performance and suggest changes to executives or decision-makers if necessary.
  • You may make risk assessments and develop risk-management strategies based on your findings.
  • In many companies, your job duties include helping make plans for specific eventualities such as a market crash, disaster, or other financial emergencies.  
  • Financial managers review market and industry data to determine current industry conditions, assess the competition, and predict if changes to financial activities are required.  
  • In this job, you are part of upper management, so you need to attend management meetings and collaborate with other senior managers.
  • For many financial managers, much of the day involves analyzing data and reports generated by the finance department. You then communicate the results of your analysis to executives and other managers. This advisory role also includes helping executives make decisions so that the company remains compliant with financial laws.

Financial Manager Salary

According to the Bureau of Labor Statistics (BLS), the median annual salary for financial managers was $127,990 in May 2018.

Salary can vary significantly. According to the BLS, the highest 10% percent of earners made more than $208,000, while the lowest 10% of financial managers made less than $67,620. Among factors that affect pay are the level of experience, professional certifications, and the type of industry in which the financial manager works.

The highest-paid financial managers work in the professional, scientific, and technical services industry. These senior-level employees enjoy a median annual salary of $151,610. Meanwhile, the lowest-earning financial managers work in government services. These professionals have an average yearly salary of $112,830.

Financial Manager Job Requirements

Financial managers typically need to have at least a bachelor’s degree in finance, economics, accounting, or a similar field. Many companies favor applicants for management positions who have an advanced degree. For financial managers, this usually means a Master of Business Administration (MBA) with a focus on finance. Some master’s degree programs offer a financial management specialization.

Unlike some master’s degree programs, schools that offer MBAs often cater to working professionals who have several years or experience and are continuing their careers while also attending graduate school.

Some companies may value professional experience as much as or more than an advanced degree. They may appreciate job experience as a financial analyst, financial advisor, or accountant.

Regardless of your academic qualifications, you usually need previous management experience to get a senior financial manager job.

Certifications and Licenses

Financial managers do not necessarily need professional certification. However, specific accreditations can help you stand out during your job search.

Some professionals with financial management ambitions, for example, choose to become Chartered Financial Analysts (CFAs). This certification comes from the CFA Institute.

CFA accreditation is open to professionals who have a bachelor’s degree or a minimum of four years of work experience. To earn the certificate, you need to pass a set of three exams over three years.

Another financial management-related accreditation is the Certified Treasury Professional certificate. The Association for Financial Professionals allows professionals who have two years of work experience or one year of experience and a graduate degree to sit for their exam.

Financial managers are also often certified public accountants (CPAs). You apply for this accreditation from your state’s board of accounting. The certification process includes passing a series of exams from the American Institute of Certified Public Accountants.

Financial Manager Job Outlook

The Bureau of Labor Statistics predicts that the demand for financial managers will grow by 16% between 2018 to 2028, which is faster than the national average for all professions (5% growth).

Knowledge of specific topics, such as risk management, cash flow, and credit intermediation, will be in high demand. At the same time, demand for financial managers in the consumer banking sector could fall as banks centralize operations.

Should I Become a Financial Manager?

You should become a financial manager if you have strong analytical skills, the confidence and experience to manage others, and excellent communication abilities.

As well as analytical, communication, and management skills, you need to be able to work with complex data sets and financial information. Because you make critical decisions based on subtle financial information and calculations, you need to have exceptional organization skills and be able to pay attention to the smallest details.

This career path requires commitment and hard work. You need either an advanced degree or professional experience to reach a management-level position. Also, relevant certifications can take several years to obtain.

Job satisfaction for financial managers often depends on their willingness to manage others and their ability to make vital decisions without experiencing too much stress. You need to be confident and experienced enough to make high-level decisions and advise executives. Job performance and the ability to make the correct decisions under pressure will greatly influence your career as a financial manager.

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