Financial Manager Career Information
What a Financial Manager does
The science of managing finances in order to minimize losses, maximize profits and achieve financial goals of a business is known as Financial Management. This also includes risk management after identifying probable risks. The person managing all this in any business is called a ‘Financial Manager’.
While this profession is also referred to as the technique of money management by experts, come to think about it, financial management is very important on a personal level too. How a person manages his/her expenditures and savings according to the earnings could determine his/her finances for a lifetime. In the corporate sector, a financial manager balances the inflow and outflow of finance in a company according to its budget. The job profile includes:
• Understanding financial reports that consist of cash inflow, out flow, profits, losses and balance sheet etc.
• Advancing the distribution of working capital within the company.
• Reviewing revenue, budget and cost forecasting.
• Finding funding alternatives for the expansion of business, both short term and long term.
• Reviewing the organization’s financial health.
• Taking crucial financial decisions concerning investments and expenditures.
A recognized profession, financial management as a career is quite sought after by Indian students. The responsibilities of a financial manager, however, vary according to the position and organization. Controller, treasurer or finance officer, cash manager, credit manager, and risk and insurance manager are some of the specific titles in this field. In addition to general responsibilities, financial managers have exclusive duties in various organizations and industries. For example, government financial managers must have a thorough knowledge of the government appropriations and budgeting processes. On the other hand, healthcare financial managers should have specialized understanding of financing issues in healthcare. Financial managers must be aware of any special tax laws or regulations concerning their specific industry.
The role of a financial manager, especially in business, has been made to evolve due to technological advances that reduce the time taken to create financial reports. These managers often work in teams and analyze data to create strategies for more efficient business dealings.
With the expansion of economies, the need for finance management professionals will only grow. From large multinational corporate houses to small firms, most organizations need workforce with financial expertise to raise capital, carry out mergers and acquisitions and gauge financial transactions. Eligible professionals in this field are also in demand in financial institutions like commercial banks, credit unions, savings and loan associations, mortgage and finance companies etc. Central and state governments also hire financial managers.
The demand for financial managers will continue to grow in the near future owing to regulatory reforms and economic growth. Many firms also hire financial managers as consultants on a temporary basis to advise senior mangers on various business operations involving financial analysis and decisions. However, be prepared to face intense competition, as the job openings may be lesser than the number of applicants. Financial managers can also go on to setting up their own businesses. Options for self employment in this field include financial and investment consultants, property consultants, insurance brokers and stockbrokers.
Abilities & Traits Required
Financial managers need various other skills such as excellent interpersonal and communication skills since they constantly interact with and manage various kinds of people, work in teams and explain complex financial information. They should also be creative, be problem-solvers, and be able to apply their analytical skills to different business situations.
As professionals in the field of financial management work extensively with different departments in a firm, they need a broad understanding of business practices and are able to work on the latest computer technology. Furthermore, the increasingly global nature of finance requires financial managers to be familiar with international finance. Being proficient in a foreign language might be quite beneficial too.
Students who want to make a career in financial management should have an academic background of finance, accounting, economics or business administration. However, it is also important for financial managers to keep upgrading their knowledge throughout their careers to stay abreast with the latest developments in the field.
BCom, MCom, BBA, and MBA courses in financial management are some options for those interested in this profession. Most of the institutes offering MBA in finance conduct their own selection process, which may consist of entrance examination, group discussion and personal interview. Many short-term courses in business and finance are also offered by various colleges in India, starting from the under graduate level to those requiring few years of work experience. One can even opt for core research in finance after completion of a Masters degree.
The earnings of a financial manager vary according to the industry, location, and organization. The remuneration is not limited to the salary only: deferred compensation in the form of stock options is becoming popular, particularly for senior level executives. Moreover, financial managers in both public and private sectors are given bonuses, which differ as per the size of the organization.
With a Masters degree and around five years of work experience, financial managers can earn a salary package of above Rs. 800000 per annum.