What Does a Financial Manager Do?

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A smiling financial manager at a desk with monitors showing growth chartsRegardless of their mission, all organizations can benefit from the work that a financial manager does. Financial managers generally oversee the financial health of an organization and help ensure its continued viability. They supervise important functions, such as monitoring cash flow, determining profitability, managing expenses and producing accurate financial information.

Whether charged with oversight of an entire financial operation or a specific aspect of finance, such as credit or risk management, financial managers are key to organizational success. Pursuing an online master’s degree in accountancy   is one way to obtain the knowledge and skills to prepare for a career in financial management.

Financial Manager Job Description

Financial managers have an extensive range of responsibilities, and what financial managers do largely depends on the type of organization. In a small business, a financial manager may be responsible for the entire financial operation, while in a large corporation, a financial manager may be more likely to specialize in a particular aspect of finance, such as financial reporting or cash management.

Common responsibilities of a financial manager include:

  • Producing accurate financial reports and information
  • Developing cash flow statements
  • Projecting profit
  • Managing credit
  • Providing advice in making financial decisions
  • Directing investments
  • Making financial forecasts
  • Budgeting
  • Managing risk of financial loss

To carry out their responsibilities, financial managers need to maintain knowledge of legal and regulatory requirements. Changes in laws, accounting pronouncements and taxation can all have a significant effect on the financial position of an organization and how it manages its finances. Therefore, financial managers need to remain well informed about the regulatory environments for their employers.

The Qualifications of a Financial Manager

To become a financial manager, individuals usually need to earn a bachelor’s degree in a field such as accounting, finance or business administration. A master’s degree in a related field can provide the enhanced knowledge and skills to advance to leadership positions.

In addition to educational credentials, individuals can pursue several professional certifications that enhance their knowledge and qualifications. Examples of certifications include:

  • The Institute of Management Accountants offers the Certified Management Accountant (CMA) certification.
  • The International Financial Management Association offers several certifications in credit analysis and management, internet finance, investments and management accounting.
  • The Global Association of Risk Professionals offers the Financial Risk Manager (FRM) certification.
  • The Association of Government Accountants offers the Certified Government Financial Manager (CGFM) certification for financial managers who work for governmental organizations.

While distinctions exist between what financial managers do and what accountants do, licensure as a certified public accountant (CPA) can be a springboard to a career in financial management in areas such as financial reporting, management accounting and cash management.

Although obtaining a certification or license isn’t required to work as a financial manager, maintaining a certification or license typically requires financial managers to complete continuing education hours to stay abreast of changes in the profession.

The Work Environment of a Financial Manager

Because what financial managers do helps to establish a firm financial footing for all other functions of an organization, almost any institution can benefit from employing financial managers, meaning that financial managers can pursue careers in a wide variety of enterprises.

Most organizations in the for-profit sector employ financial managers, including:

  • Small businesses
  • Corporations
  • Banks
  • Financial services firms
  • Investment firms
  • Insurance companies
  • Brokerage firms
  • Health care organizations

Nonprofit organizations also rely on financial managers. For example, financial managers can work for:

  • Higher education institutions
  • Charitable organizations
  • Foundations
  • Museums
  • Religious organizations

In the public sector, financial managers can work for any governmental entity responsible for substantial public funds. Examples of federal, state and local entities that are particularly well suited to financial management are:

  • Treasury agencies
  • Comptroller offices
  • Budget offices

Financial Manager Salary and Job Outlook

According to the U.S. Bureau of Labor Statistics (BLS), the median annual pay for financial managers was $129,890 in 2019. The BLS also projects that employment of financial managers will grow by 15% between 2019 and 2029, faster than its 4% projection for all occupations.

In its 2021 ranking of best jobs, U.S. News &World Report ranked financial manager No. 3 among Best Business Jobs, No. 16 among Best Paying Jobs and No. 17 among the Best 100 Jobs.

Pursuing a Career in Financial Management

Financial managers play an important role in keeping organizations financially strong — their expertise in establishing a sound financial position is critical to an enterprise’s ability to achieve its mission. Those interested in a career in financial management should consider an online degree that offers the foundational knowledge and key skills that can make them indispensable. The University of North Dakota offers an online Master of Accountancy program, with tracks for both those with an accounting background and those without, that provides students the theoretical underpinnings and practical experience to embark on a career in financial management. Take the first step toward a new career today.

 

Sources:

American Institute of CPAs, CPA Career Paths

Association of Government Accountants, CGFM Certification

Forbes, “5 Ways Financial Mismanagement Will Kill Your Business”

Global Association of Risk Professionals, Financial Risk Manager (FRM)

Houston Chronicle, “The Difference Between Accountants and Financial Managers”

Houston Chronicle. “Steps to Becoming a Successful Financial Manager”

Houston Chronicle, “Why Is Financial Management So Important in Business?”

Institute of Management Accountants, CMA Certification

International Financial Management Association, Home

Money Talks News, The 10 Best-Paying Jobs That Don’t Require an Advanced Degree

U.S. Bureau of Labor Statistics, Financial Managers

U.S. News & World Report, Financial Manager Overview