Financial managers create financial reports, direct investment activities, and develop plans for the long-term financial goals of their organization.
What they do
Financial managers are responsible for the financial health of an organization. They create financial reports, direct investment activities, and develop plans for the long-term financial goals of their organization.
Financial managers typically do the following:
- Prepare financial statements, business activity reports, and forecasts
- Monitor financial details to ensure that legal requirements are met
- Supervise employees who do financial reporting and budgeting
- Review financial reports and seek ways to reduce costs
- Analyze market trends to maximize profits and find expansion opportunities
- Help management make financial decisions
Financial managers spend much of their time analyzing data and advising senior managers on ways to maximize profits. They often work on teams, acting as advisors to top executives.
Financial managers must have knowledge of the topics, tax laws, and regulations that are specific to their organization or industry. For example, government financial managers must be experts on appropriations and budgeting processes; healthcare financial managers must understand billing, reimbursement, and other business matters related to healthcare.
The following are examples of types of financial managers:
Controllers direct the preparation of financial reports that summarize and forecast an organization’s financial position. These reports may include income statements, balance sheets, and analyses of future earnings or expenses. Controllers also are in charge of preparing reports required by governmental agencies that regulate businesses. Often, controllers oversee the accounting, audit, and budget departments of their organization.
Treasurers and finance officers direct an organization’s budgets to meet its financial goals. They oversee investments and other plans to raise capital, such as issuing stocks or bonds, to support their organization’s growth. They also develop financial plans for mergers (two companies joining together) and acquisitions (one company buying another).
Credit managers oversee an organization’s credit business. They set credit-rating standards, determine credit limits, and monitor the collections of past-due accounts.
Cash managers monitor and control the flow of money into and out of an organization to meet business and investment needs. For example, they must project whether the organization will have a shortage or surplus of cash.
Risk managers use strategies to limit or offset an organization’s chance of financial loss or exposure to financial uncertainty. Among the risks they try to limit are those arising from currency or commodity price changes.
Insurance managers decide how to limit an organization’s losses by protecting against risks, such as for disability payments to an employee who gets hurt on the job or for costs imposed by a lawsuit against the organization.
Financial managers work closely with top executives and with departments that develop data needed for analysis.
How to become a Financial Manager
Financial managers typically need a bachelor’s degree and 5 years or more of experience in another business or financial occupation, such as an accountant, securities sales agent, or financial analyst.
Financial managers typically need at least a bachelor's degree in finance, accounting, economics, or business administration. However, many employers prefer to hire candidates who have a master’s degree in those same fields. These disciplines help students learn analytical skills and methods.
Although it is not required, professional certification indicates competence for financial managers who have it. The CFA Institute confers the Chartered Financial Analyst (CFA) certification to investment professionals who have at least a bachelor’s degree or 4 years of work experience, or a combination of experience and education, and who pass three exams. The Association for Financial Professionals confers the Certified Treasury Professional (CTP) credential to those who have at least 2 years of relevant experience or 1 year of experience and a graduate degree in business, finance, or a related field. This association also confers the Certified Corporate Financial Planning Analysis Professional (FP&A) credential to those who have a bachelor’s degree or who are currently enrolled in an undergraduate program with a finance-related major and will graduate within 2 years. Both credentials require passing an exam.
Certified public accountants (CPAs) are licensed by their state’s board of accountancy and must pass an exam administered by the American Institute of Certified Public Accountants (AICPA)
The median annual wage for financial managers was $129,890 in May 2019. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $68,370, and the highest 10 percent earned more than $208,000.
Employment of financial managers is projected to grow 15 percent from 2019 to 2029, much faster than the average for all occupations. However, growth will vary by industry.
Services provided by financial managers, such as planning, directing, and coordinating investments, are likely to stay in demand as the economy grows. In addition, several specialties within financial management, particularly cash management and risk management, are expected to be in high demand over the decade.
Similar Job Titles
Assistant Manager, Assistant Vice President (AVP), Banking Center Manager (BCM), Banking Officer, Branch Manager, Credit Administration Manager, Financial Center Manager, Regional Manager, Service Center Manager, Vice President, Controller, Financial Officer
Marketing Manager, Sales Manager, Public Relations and Fundraising Manager, Sales Agent-Securities and Commodities, Sales Agent-Financial Services
The trade associations listed below represent organizations made up of people (members) who work and promote advancement in the field. Members are very interested in telling others about their work and about careers in those areas. As well, trade associations provide opportunities for organizational networking and learning more about the field’s trends and directions.
- American Bankers Association - From delivering the latest industry news to developing mission-critical training offerings, this organization supports America's banks as they perform their vital role in energizing the economy and helping communities thrive.
- American Institute of CPAs - The AICPA represents the CPA profession nationally regarding rule-making and standard-setting, and serves as an advocate before legislative bodies, public interest groups and other professional organizations.
- Financial Management Association International - FMA's mission is to broaden the common interests between academicians and practitioners, provide opportunities for professional interaction between and among academicians, practitioners and students, promote the development and understanding of basic and applied research and of sound financial practices, and to enhance the quality of education in finance. Lots of information for career advancers and students.
- Financial Managers Society - FMS focuses on providing first-class education, community support, networking and professional development for finance industry members. With membership from banks, thrifts, credit unions and affiliate partners from across the country FMS has established themselves as a National society.
- Insurance Accounting & Systems Association - The IASA community accelerates professional growth to shape, influence, elevate and strengthen the insurance industry. Students, check out the Learning Center.
- S. Chamber of Commerce - The U.S. Chamber of Commerce is the world’s largest business organization representing companies of all sizes across every sector of the economy. Their members range from the small businesses and local chambers of commerce that line the Main Streets of America to leading industry associations and large corporations. They all share one thing: They count on the U.S. Chamber to be their voice in Washington, across the country, and around the world. For more than 100 years, the U.S. Chamber of Commerce has advocated for pro-business policies that help businesses create jobs and grow our economy.
Magazines and Publications
How do businesses steer clear of major risks, and stay on the up side of profit? You’d have to ask a financial manager! They keep a constant eye on operational costs, and evaluate the financial strengths and weaknesses of a company’s interests. Most financial managers work at a high level, advising top executives in an organization on broad decisions for its future. Being well-versed in legal requirements and current market trends gives them insight into how their organization can expand and acquire new assets, and where they could cut costs. Minimizing loss and damages is a major focus in this role, so they must understand what factors pose a risk to their organization’s success, and track them carefully. These managers review a lot of data and many reports, and use that information to propose new strategies to leaders. At the same time, like other managers, they hire and supervise employees. Financial managers usually have a bachelor’s degree in finance, business administration, or economics. Increasingly, employers choose candidates with a master’s degree or higher. Overseeing the finances of an organization is a challenging job, but financial managers make it all add up.
Content retrieved from: US Bureau of Labor Statistics-OOH www.bls.gov/ooh,
CareerOneStop www.careeronestop.org, O*Net Online www.onetonline.org