Finance Director

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.

Duties

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 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.

Education

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.

Licenses, Certifications, and Registrations

Although it is not required, professional certification indicates competence for financial managers who have it. The Association of Government Accountants (AGA) offers the Certified Government Financial Manager (CGFM) designation to financial managers working with federal, state, or local government. To earn this certification, candidates must have a bachelor’s degree from an accredited college or university, pass examinations, and have professional-level experience in government financial management. To keep the certification, CGFMs must complete continuing professional education.

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).

Work Experience in a Related Occupation

Financial managers usually have experience in another business or financial occupation. For example, they may have worked as a loan officer, accountant, securities sales agent, or financial analyst.

In some cases, companies provide management training to help prepare motivated, skilled financial workers to become managers.

Advancement

Experienced financial managers may advance to become chief financial officers (CFOs). These executives are responsible for the accuracy of an organization’s financial reporting.

Important Qualities

Analytical skills. To assist executives in making decisions, financial managers need to evaluate data and information that affects their organization.

Communication skills. Financial managers must be able to explain and justify complex financial transactions.

Detail oriented. In preparing and analyzing reports, such as balance sheets and income statements, financial managers must be precise and attentive to their work in order to avoid errors.

Math skills. Financial managers need strong skills in certain branches of mathematics, including algebra. Ability to understand international finance and complex financial documents also is important.

Organizational skills. Because financial managers deal with a range of information and documents, they must have structures in place to be effective in their work.

The median annual wage for financial managers was $134,180 in May 2020. 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 $70,830, and the highest 10 percent earned more than $208,000.

In May 2020, the median annual wages for financial managers in the top industries in which they worked were as follows:

Most financial managers work full time, and some work more than 40 hours per week.