The attached report highlighted the matters that were identified during an occupational overview: Finance Manager. The study revealed that about 3 of 10 finance managers are employed within the finance industry. The position requires a bachelor’s degree in accounting, finance, or any other business course with certification from professional bodies.
The report addressed recommendations to the Chief Executive Officer, Financial Officer, and IT Manager. A draft of the report was provided to each of these officials or their designees, who fully concurred with the findings. The officials or designees agreed to the implementation of the recommendation.
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Abstract
The study revealed that a financial manager plays essential to provide financial guidance and support to an organization. However, their professional roles vary depending on the place of work. Since financial managers determine organizational financial health, they produce financial reports and long-term financial goals. The scope of the report includes an occupational description such as requirements and education, duties and responsibilities, salary and benefits, and professional outlook. The findings of the report are vital considering the influence financial managers have on assisting the executives in making organizational decisions. Thus, they require analytical abilities and excellent communication skills. The profession does not need on-the-job training. In 2016, the number of financial jobs created was 580,400. The projection for job outlook was 2016-2026 with anticipated growth of 19%. In a similar period, the employment change would be 108,600.
Occupational Description
Financial managers work within both the private and public sector where their roles involve providing financial advice and undertake duties associated with accounts administration. In a large organization, the occupation involves focusing on the strategic analysis while in a smaller company, the specifications include concentrating on preparing accounts. In either case, the roles of the finance manager are producing reports and researching the financial situation of the company.
Requirements and Education
Finance Manager conducts essential roles within an organization. Therefore, as a requirement, a candidate for such a position should portray proven experience in dealing with finances or financial analysis in either private or public sectors (Accounting Jobs Today, 2018). There is a need for an extensive understanding of the financial trends within the company and general market dynamics.
Technology is fast changing how business operations are carried out, and reports are delivered. Each business is keen to integrate technology to be efficient and reduce the cost of maintenance. Thus, as a critical requirement, the finance manager position requires a proficient user of finance software: ADDA software, Alpha Capture System, Anti-money Laundering Software, and Automated Customer Account Transfer Software.
Strong interpersonal, communication and presentation skill are needed for efficient operations of the Financial Manager (Gulko, 2010). Every employer looks for evidence of excellent oral and written communication skills, teamwork, commercial awareness, initiative, and self-motivation. Consequently, these qualities are critical for excellent problem-solving, numerical, IT, and technical analysis.
Finance Manager should be able to manage, guide, and lead other workers to ensure reliable and efficient financial processes are used. Leadership qualities are essential for those in senior managerial positions to enable them to make necessary organizational decisions (Hiebl, 2017). Leadership skills and attributes that the Finance Manager should portray are empathy and emotional intelligence and team building skills.
Finance Manager should have an interest in persuasion and organization thematic areas. Persuasion focuses on influencing, motivating, and selling to others while organization involves working with information and processes to keep everything in order. Personality traits required are:
Analytical skills: Financial managers are essential in assisting the executive to make decisions affecting the organization. Thus, analytical ability is vital to comprehend the available information.
Communication skills: Excellent communication skills are vital for a finance manager since the position involves explaining and justifying analyzed complex financial transactions within the organization.
Detail oriented skills: The position involves preparing and analyzing important organizational reports. Thus, the finance managers must focus on details.
Mathematical skills: Finance manager need mathematical skills such as algebra to solve critical management puzzles. The managers should also understand international financial practices and complex financial reports.
Organizational skills: The position requires financial manager to handle a variety of data and documents. Hence, they need to remain connected and organized for effectiveness.
Education is an essential element to qualify as a Finance Manager. The minimum education qualification is a bachelor’s degree in Accounting, Finance, and Economics. Nonetheless, most employers are now seeking candidates with advanced degree, preferably Risk Management, Finance, and Economics (Dejong & Ling, 2013). The courses are essential in developing analytical skills and providing managers with adequate knowledge of financial analysis, associated methods, and technology. A relevant education discipline is vital to reduce the amount of taken to gain a professional qualification with professional bodies and enable exemptions from certain examinations.
For some financial manager positions, the experience might be more essential than formal education, especially in the banks which fill vacancies by promoting experienced senior professionals within the organization (Monster for Employers, 2018). Some managers enter the occupation by undertaking formal management studies. The finance industry is fast changing. Hence, continuing education is essential to the finance managers since they must cope with the rising complexities associated with global trade, changing financial regulations, and the propagation of innovative market systems.
There are also openings for employees for widening their skills and knowledge by motivating them to consider institutions of higher learning or attending conferences. On the other hand, some managers expand their skills and exhibit high competency levels through professional certification. With the globalized market, finance managers require conferment of Chartered Financial Analysts from CFA Institute for those with bachelor’s degree and meet the needed work experience requirements. Finance managers also require Certified Cash Manager from the Association for Financial Professionals (AFP): more than two years of working experience is needed for certification. The Institute of Management Accountants also offers finance managers Certified in Finance Management.
Duties and Responsibilities
The roles and responsibilities of the finance manager vary from one business to another. Nevertheless, there are tasks that common regardless of the organization: meeting with the departmental heads, liaising with different account teams, daily reporting, providing back-office services like collection and payroll and accounts payable, managing and coordinating financial processes, and monitoring organizational cash flows (Andrews, 2009). In business, the role of finance manager has changed to respond to technological advancements. These practices have reduced the time taken for the production of vital financial reports.
In every organization, there is a financial manager who oversees how financial reports are prepared, implement institutional cash management practices, and ensure efficient direct investment activities. With computers increasingly utilized in recording and organizing information, most financial managers are keen to develop mechanisms and implementing long-term institutional goals. Financial managers’ roles are divided based on the titles:
Controllers:
The controllers define how financial reports are summarized and forecast financial position of the business by preparing balance sheets, income statements, and analyzing the future organizational spending or earning. They also prepare special reports needed by the regulatory agencies
Treasurers: Treasurers and finance officers are essential in directing financial goals, budgets, and objectives of the business. Additionally, they are responsible for overseeing institutional investment funds, managing risks, and raising capital for supporting business expansion.
Credit and cash managers: They supervise how credits are issued, create institutional credit evaluation system, and monitoring collection of the past dues. On the other hand, the cash managers are responsible for monitoring and controlling disbursement and receipts of cash for meeting business investments. Organizations require cash flow projections to determine if there is a need to obtain loans to cash needs.
Risk and insurance manager: Such finance managers oversee business programs that assist in minimizing risks that could occur due to financial transactions and managing insurance budget of the organization.
Finance manager also helps to conduct preceding general duties and to achieve their objectives effectively, they need to understand special tax laws and regulations influencing industrial operations. In addition, their roles have been associated with consolidations and international organizational extension and associated financing. Such roles need widespread and specialized knowledge for reducing business risks and maximizing revenues.
The managers are also important in monitoring financial details to assist businesses meet legal requirements for efficient business operations. Financial institutions and departments have become an avenue for siphoning organizational resources (U.S. Bureau of Labor Statistics, 2018). Therefore, finance managers must undergo through the rigorous legal process to achieve certification to protect institutional sustainability. To protect the business and ensure efficient business operation, Finance manager develops relationships with external contacts like professional bodies, revenue and customs agencies, solicitors, and auditors.
The managers are also required to review financial reports of the company and seek ways to reduce the cost of expenditure. Each business should keep check of the revenues and spending to secure organizational profitability. A qualified manager understands business operations and associated costs to make critical decisions. Finance manager must also be able to analyze market trends to help maximize business profit and identify opportunities.
The finance manager contracts outside services to undertake vital professional services within the department including tax preparation, investments, auditing, and banking since they understand market dynamics (U.S. Bureau of Labor Statistics, 2018). Consequently, the managers are helpful in providing insightful information and expectation to those in managerial positions for the long-term decision-making process. To maintain efficiency in financial management, the manager should stay up-to-date with enhanced technology and various accounting software for economic analysis.
The role also involves establishing and maintaining financial policies and procedures for the organization. However, such tasks require an understanding of the legal framework to ensure that the plans conform to the state, federal, and municipal laws and regulations. Finance manager also undertakes market research into the practices of the competitors, pricing, and factors influencing performance. Market research skills are vital to assist manage budgets and tailor organizational decisions towards meeting the needs of the clients.
Salary and Benefits
The pay for finance managers has changed over the past decades. In 2004, the median annual pays for the managers stood at $81,880. However, in 2017, the median annual wage was $125,080 revealing in earnings (U.S. Bureau of Labor Statistics, 2018). There is need to note that the median wage is the threshold at which half of the employees were paid more than that amount within the remaining earning less. In a similar year, the statistics pointed that the lowest 10% of the financial managers were paid less than $66,480. On the other hand, those on the highest 10% were paid amounts higher than $208,000. The statistics from the U.S. Bureau of Labor Statistics revealed that the median annual wages in the best performing organizations were as outlined:
From the data, most financial managers worked full time, and about 1 in every 3 were working for durations exceeding 40 hours within a week. Well-established businesses pay more salaries and wages than the smaller entities. Nevertheless, the pay depends on the type of industry under which the organization operate and location. Most of the financial managers receive additional compensation in various forms such as bonuses depending on organizational size. However, deferred compensation is becoming common for the senior management team.
Figure 1: Financial Manager Salary Pattern (Source: US News, 2018)
Job Outlook
Over recent years, the jobs for the financial managers had been anticipated to grow by 19% from 2016 to 2022. The growth has been attributed to increased demand for effective financial management across businesses. Moreover, the growth is set to be faster than in other professions. Yet, variation depends on the industry in which the company operates. The increasing need for the finance manager is also due to various regulatory reorganizations and expansion of economies anticipated to drive job growth in the coming decades (Dejong & Ling, 2013). With the development of the economies, both the development of well-established businesses and the emergence of new companies are expected to spur demand for financial managers. There are also practices likely to restrict employment growth: mergers, corporate downsizing, and acquisitions.
Finance managers seeking employment opportunities should expect to face competition due to a limited number of job vacancies. Applicants with proficiency in accounting and finance enjoy job prospects. With the advancement and integration of technology in all business processes, excellent computer skills have become vital. These experiences are also critical in developing communication skills, which are essential since financial management involves working with strategic planning teams (Lail & Martin, 2017). The practice has changed, and hence, finance managers require an adequate understanding of compliance procedures. There are many regulatory adjustments made to protect companies in recent years.
In short-term, employment growth for the finance manager position may slow or reverse due to the economic recession: a period in which companies could close departments, downsize workers, or go out business. These activities reduce the demand for financial managers within the organization. The banking industry is expected to merge, but at a slower pace than in the past. Despite such trends, for banks, employment of finance managers in the branches is set to increase since they are rechanneling their efforts on the significance existing branches and establishing more in a bid to cater for the needs of the rising population (Accounting Jobs Today, 2018). As businesses continue to expand and offer a wide range of products and services, financial managers will be required to handle various roles. Thus, certified candidates will be more considered in the future openings.
In the long-run, the predictions for the finance managers operating in the commodity industry are expected to be favorable since professionals will be demanded for handling complex financial transactions and the rising organizational investments. Finance managers will also assist in raising capitals and assessing international financial transactions. The demand risk managers for assessing risk for investment and insurance roles is also set to increase. Some businesses may even resort to hiring financial managers temporarily to help the business through a short-term emergency or recommend ways of increasing organizational profits. However, other companies may contract out all the financial and accounting activities. Even with such inclination towards the other professions, finance managers are required to oversee the contracts.
Technology is vital integrating professions that deal with finances. Additionally, it has reduced the duration and the staff required for the production of reports. Consequently, roles such as earnings, profits, and costs forecasting, idea generation, and creative methods of enhancing profitability will be for the corporate financial managers in the next decades. Services such as planning, directing, and coordination of investment activities offered by the financial managers are to remain in demand with the growing economy. Moreover, some specialties within financial management such as risk and cash management will be in high demand, which in turn is to increase the need for financial managers.
In recent years, businesses have accrued more cash through their operations, especially the multinational corporations. With continued globalization, the trend will continue leading to increased demand for financial managers. However, there has been rising need to emphasis on risk management skills in the financial sector (Fitch, 2007). While responding to various challenges associated with financial emergency and regulatory reforms, businesses will emphasize stabilizing and managing risks instead of maximizing profits. These patterns are set to lead create job opportunities for the risk managers.
In the credit intermediation sector, primarily the financial institutions, most of the employees are financial managers by profession. With consumers progressively transacting online, several branches of the financial institutions are expected to close. Such patterns limit employment growth within the sector. The designs also affect clerical occupations such as tellers. The study by the Bureau of Labor Statistics projected that from 2016 to 2026 job opportunities for financial managers would rise by 14% in the banking industry.
Conclusion
The financial manager is one of the key personnel required for the efficient operations of the business. The report addressed various issues including a description of the occupation by analyzing requirements and education, duties and responsibilities, salaries and benefits, and occupational outlook. In 2017, the median salary pay for finance managers was $125,080 annually translating to $60.14 hourly. The entry level of education is bachelor’s degree with five years or more work experience in a relevant field. The profession does not require on-the-job training. In 2016, the number of relevant jobs created was 580,400. The projection for job outlook was 2016-2026 with anticipated growth of 19%. In a similar period, the employment change would be 108,600. Financial managers conduct a wide range of roles including determining the financial health of the business, producing financial reports and plans need for long-term organizational financial objectives. The managers work in different industries including financial institutions and insurance businesses with most of them working for 40 hours a week based on the 2016 statistics. Financial manager position brings together personnel from different professions such as cash and risk managers and accountants. In addition, it combines formal education with experience in finance disciplines: credit operations, insurance risk control, asset management, and securities investment.
References
Accounting Jobs Today. (2018). Occupational Outlook: Financial Managers. Retrieved October 26, 2018, from http://www.accountingjobstoday.com/cm/Articles/occupational-outlook-financial-managers.html
Andrews, B. (2009). Getting and finding financial managers jobs: The ultimate guide for job seekers and recruiters. Qld., Australia: Emereo Pty Ltd.
Dejong, D., & Ling, Z. (2013). Managers: Their Effects on Accruals and Firm Policies. Journal of Business Finance & Accounting, 40(1-2), 82-114. doi:10.1111/jbfa.12012
Fitch, T. P. (2007). Career opportunities in banking, finance, and insurance. New York: Checkmark Books.
Gulko, C. S. (2010). Accounting, business, and finance. New York, NY: Ferguson.
Hiebl, M. R. (2017). Finance managers in family firms: an upper-echelons view. Journal of Family Business Management, 7(2), 207-220. doi:10.1108/jfbm-07-2016-0014
Lail, B. E., & Martin, G. W. (2017). Are Entrenched Managers’ Accounting Choices More Predictive of Future Cash Flows? Journal of Business Finance & Accounting, 44(5-6), 593-610. doi:10.1111/jbfa.12247
Monster for Employers. (2018). Finance Manager Job Description Sample. Retrieved October 26, 2018, from https://hiring.monster.co.uk/hr/hr-best-practices/recruiting-hiring-advice/job-descriptions/finance-manager-job-description.aspx
U.S. Bureau of Labor Statistics. (2018, March 30). Occupational Employment and Wages, May 2017: 11-3031 Financial Managers. Retrieved October 26, 2018, from https://www.bls.gov/oes/current/oes113031.htm
U.S. Bureau of Labor Statistics. (2018, April 13). Financial Managers: Occupational Outlook Handbook. Retrieved October 26, 2018, from https://www.bls.gov/ooh/management/financial-managers.htm#tab-1
US News. (2018). How Much Can a Financial Manager Expect to Get Paid? Retrieved October 27, 2018, from https://money.usnews.com/careers/best-jobs/financial-manager/salary
