In a large or small organization, a financial manager is in charge of the money-related functions. He or she has authority over income, costs, payroll, investments, mergers, and acquisitions while reporting to corporate management or a board of directors. This person will frequently collaborate with other members of the management team on issues that may have an impact on the organization’s financial health. Although corporate money managers are the most common type of financial manager, most organizations that deal with large sums of money, such as non-profits and governments, require one.
Financial Managers Come in a Variety of Shapes and Sizes
The term “financial manager” is a catch-all term that covers a wide range of jobs; job titles differ depending on the person’s responsibilities and the organization’s management structure. Treasurers, finance officers, and controllers are those at or near the top of the corporate ladder, and their influence often extends beyond the financial realm. Cash and credit managers, on the other hand, deal with the details of daily cash and credit flow. Risk managers and insurance managers deal with the economic uncertainties, such as stock trading, insurance, and legal issues.
Responsibilities
The financial manager is in charge of overseeing all aspects of an organization’s finances, as well as the employees who work in this department. This person prepares and distributes financial statements and reports to interested parties both inside and outside the company. In addition, he or she consults with tax attorneys and prepares tax returns and payments. Making recommendations to management on matters such as cost reduction and the feasibility of merging with or acquiring other companies may be part of the job description in corporate finance.
Regulations and Laws
These managers must ensure that all financial activity complies with local and national regulations in addition to their organizations’ internal requirements. In many countries, a complex set of laws exists to prevent financial malfeasance, and financial managers, even if they are only consultants, may be held liable for their clients’ unethical behavior. For example, in 2002, the accounting firm Arthur Andersen was linked to the financial misdeeds of its corporate client Enron, and both companies were forced to close.
Education and Skills
People who work in financial management must have a thorough understanding of mathematics, economics, and all applicable laws. A bachelor’s degree in finance or a related field is the minimum requirement, but those who want to advance in their careers will almost always pursue a master’s degree. Certification from a professional organization such as the Chartered Financial Analyst Institute is also an option, but it is not required. The most important thing is to have a thorough understanding of how various activities affect a company’s bottom line, which is often best learned through years of hands-on experience.
Progression
Finance management is typically a high-level position, and an aspiring financial manager is usually promoted after working in a related position such as financial analyst, accountant, or auditor. Some businesses offer finance management training. Many financial managers in large corporations were able to secure these positions after successful stints in the same capacity with smaller businesses.
An aspirant financial manager may be able to advance to a corporate position such as vice president of finance or chief financial officer (CFO), or another management position, as an executive. Some people, on the other hand, prefer to start their own accounting, investment, or related consulting firms. When it comes to running their own businesses, their extensive knowledge of corporate management can be beneficial.