Financial managers undertake the difficult task of ensuring that an organization’s cash flow remains positive. Financial managers use long-range financial planning, statistical analysis, profit and loss statements and financial models to evaluate the health of a company and to determine the best path forward to ensure profitability.
Nearly all financial management positions require a degree in finance or a related field. Check out the programs below which offer free information:
According to the Bureau of Labor Statistics, job growth in the financial management industry is expected to be 8% through 2018, which is the same as job growth for the total U.S. economy. However, competition for jobs will be fierce. The increasing complexity of financial markets and financial transactions will increase the demand for highly educated and highly experienced candidates.*
*According to the BLS, http://www.bls.gov/oco/
Financial Management Job Responsibilities
Financial managers are responsible for many finance-related tasks within an organization. First and foremost, the manager is in charge of evaluating the current state of the business. Managers prepare and evaluate profit and loss and cash flow statements to determine which areas of the business are profitable and which areas are underperforming.
Managing investment activities is another area of responsibility for a financial manager. Managers oversee investment opportunities and ensure that a cash management strategy is in place.
Finally, financial managers use their financial expertise to work with management across the company to determine long-range development and investment strategies in order to ensure the company is profitable and cash flow positive.
Financial Management Training and Education Requirements
Nearly all financial manager positions require a minimum of a bachelor’s degree in a related field such as finance, accounting or economics. The most competitive job candidates have advanced degrees such as a master’s degree in business administration or economics.
Business, math, economic and communication classes are the most relevant courses for potential financial managers. Accounting classes are important as well, since some financial management roles require a CPA certification.
While education is a prerequisite to entering the financial management industry, experience is a key factor to climbing the job ladder. Managers are often promoted within a company as positions open up. Some companies have formal financial management training programs for newly hired employees. Because the financial management industry places such a high value on experience, it is important to consider the tradeoff between extra years of school and extra years of job experience.
In addition to a relevant educational background and experience, financial managers need strong communication and math skills. Managers need the business and math savvy to understand complex financial transactions and the communication skills to be able to clearly communicate financial results to people across the organization.
Financial Management Salary and Wages
Financial managers enjoy above-average salaries. According to the Bureau of Labor Statistics, the median annual salary for a financial manager is approximately $100,000. The middle fifty percent of financial managers earn between $70,000 and $135,000 annually. In addition to the annual salary, it is common for employees to receive a bonus, which varies greatly by firm and by level of experience. Senior executives often receive stock options as a form of deferred compensation.*
*According to the BLS, http://www.bls.gov/oco/
Variations in financial management wages occur for a variety of reasons. Firms in large metropolitan areas tend to pay more than those located in smaller cities, and large companies usually pay higher salaries than small companies.
Financial Management Certifications
In general, no special certification is required to obtain an entry-level financial management position. However, in some circumstances, financial managers may need to obtain a Certified Public Accountant (CPA) certification prior to or shortly after beginning work. This is generally required for those financial managers that work in accounting departments.
A common advanced certification among financial managers is the Chartered Financial Analyst, or CFA, designation. The exam consists of three separate tests and is offered through the CFA Institute. To qualify, candidates must have at least a bachelor’s degree.
Another available certification is the Certified Treasury Professional (CTP) certificate, which is offered through the Association for Financial Professionals. To qualify, candidates must pass a computer-based exam and have two years of relevant experience.
The Certified Management Accountant (CMA) designation is also common in the industry. This certificate is offered through the Institute of Management Accountants to those who have at least two year’s work experience and a bachelor’s degree. Successful applicants must complete a four-part exam and pass continuing examination courses.
The CFA, CTP and CMA designations allow financial managers to get a leg up in the job market and to distinguish themselves among colleagues and potential clients.
Financial Management Professional Associations
The leading financial management organization is the Association for Financial Professionals (AFP), which has a membership of over 150,000 treasury and finance professionals. Each year, the AFP holds an annual conference which brings together more financial professionals that any other event in the world.
For those financial managers who wish to take a more academic look at finance, the American Finance Association (AFA), is an organization which focuses on the study and discussion of financial theory. The association publishes the Journal of Finance and was founded in 1939. AFA has 8,000 members who exchange financial ideas and theories.