Nature of the Work |
Working Conditions |
Employment |
Training, Other Qualifications, and Advancement |
Job Outlook |
Significant Points
- A bachelor’s degree in finance, accounting, or a related field is the minimum academic preparation, but many employers increasingly seek graduates with a master’s degree.
- The increasing need for financial expertise will spur employment growth.
Nature of the Work (Back to Top)
Almost every firm, government agency, and organization has one or more financial managers who oversee the preparation of financial reports, direct investment activities, and implement cash management strategies. As computers are increasingly used to record and organize data, many financial managers are spending more time developing strategies and implementing the long-term goals of their organization.
The duties of financial managers vary with their specific titles, which include controller, treasurer, credit manager, and cash manager. Controllers direct the preparation of financial reports that summarize and forecast the organization’s financial position, such as income statements, balance sheets, and analyses of future earnings or expenses. Controllers also are in charge of preparing special reports required by regulatory authorities. Often, controllers oversee the accounting, audit, and budget departments. Treasurers and finance officers direct the organization’s financial goals, objectives, and budgets. They oversee the investment of funds and manage associated risks, supervise cash management activities, execute capital-raising strategies to support a firm’s expansion, and deal with mergers and acquisitions.
Cash managers monitor and control the flow of cash receipts and disbursements to meet the business and investment needs of the firm. For example, cashflow projections are needed to determine whether loans must be obtained to meet cash requirements or whether surplus cash should be invested in interest-bearing instruments. Risk and insurance managers oversee programs to minimize risks and losses that may arise from financial transactions and business operations undertaken by the institution. They also manage the organization’s insurance budget. Credit managers oversee the firm’s issuance of credit. They establish credit-rating criteria, determine credit ceilings, and monitor the collections of past-due accounts. Managers specializing in international finance develop financial and accounting systems for the banking transactions of multinational organizations.
Financial institutions, such as commercial banks, savings and loan associations, credit unions, and mortgage and finance companies, employ additional financial managers who oversee various functions, such as lending, trusts, mortgages, and investments, or programs, including sales, operations, or electronic financial services. These managers may be required to solicit business, authorize loans, and direct the investment of funds, always adhering to Federal and State laws and regulations.
Branch managers of financial institutions administer and manage all the functions of a branch office, which may include hiring personnel, approving loans and lines of credit, establishing a rapport with the community to attract business, and assisting customers with account problems. Financial managers who work for financial institutions must keep abreast of the rapidly growing array of financial services and products.
In addition to the general duties described above, all financial managers perform tasks unique to their organization or industry. For example, government financial managers must be experts on the government appropriations and budgeting processes, whereas healthcare financial managers must be knowledgeable about issues surrounding healthcare financing. Moreover, financial managers must be aware of special tax laws and regulations that affect their industry.
Areas in which financial managers play an increasingly important role involve mergers and consolidations, and global expansion and financing. These developments require extensive, specialized knowledge on the part of the financial manager to reduce risks and maximize profit. Financial managers increasingly are hired on a temporary basis to advise senior managers on these and other matters. In fact, some firms contract out all accounting and financial functions to companies that provide these services.
The role of financial manager, particularly in business, is changing in response to technological advances that have reduced the amount of time it takes to produce financial reports significantly. Financial managers now perform more data analysis and use it to offer senior managers ideas on how to maximize profits. They often work on teams, acting as business advisors to top management. Financial managers need to keep abreast of the latest computer technology in order to increase the efficiency of their firm’s financial operations.
Working Conditions (Back to Top)
Financial managers work in comfortable offices, often close to top managers and to departments that develop the financial data these managers need. They typically have direct access to state-of-the-art computer systems and information services. Financial managers commonly work long hours, often up to 50 or 60 per week. They generally are required to attend meetings of financial and economic associations and may travel to visit subsidiary firms or to meet customers.
Employment (Back to Top)
Financial managers held about 658,000 jobs in 2000. Although these managers are found in virtually every industry, more than one-fourth were employed by services industries, including business, health, social, and management services. Three out of 10 were employed by financial and related institutions, such as banks, savings institutions, finance companies, credit unions, insurance companies, securities dealers, and real estate firms.
Training, Other Qualifications, and Advancement (Back to Top)
A bachelor’s degree in finance, accounting, economics, or business administration is the minimum academic preparation for financial managers. However, many employers increasingly seek graduates with a master’s degree, preferably in business administration, economics, finance, or risk management. These academic programs develop analytical skills and provide knowledge of the latest financial analysis methods and technology.
Experience may be more important than formal education for some financial manager positions—notably, branch managers in banks. Banks typically fill branch manager positions by promoting experienced loan officers and other professionals who excel at their jobs. Other financial managers may enter the profession through formal management trainee programs offered by the company.
Continuing education is vital for financial managers, reflecting the growing complexity of global trade, shifting Federal and State laws and regulations, and a proliferation of new and complex financial instruments. Firms often provide opportunities for workers to broaden their knowledge and skills by encouraging employees to take graduate courses at colleges and universities or attend conferences related to their specialty. Financial management, banking, and credit union associations, often in cooperation with colleges and universities, sponsor numerous national and local training programs. Persons enrolled prepare extensively at home, then attend sessions on subjects such as accounting management, budget management, corporate cash management, financial analysis, international banking, and information systems. Many firms pay all or part of the costs for those who successfully complete courses. Although experience, ability, and leadership are emphasized for promotion, advancement may be accelerated by this type of special study.
In some cases, financial managers also may broaden their skills and exhibit their competency in specialized fields by attaining professional certification. For example, the Association for Investment Management and Research confers the Chartered Financial Analyst designation on investment professionals who have a bachelor’s degree, pass three test levels, and meet work experience requirements. The National Association of Credit Management administers a three-part certification program for business credit professionals. Through a combination of experience and examinations, these financial managers pass from the level of Credit Business Associate to Credit Business Fellow and, finally, to Certified Credit Executive. The Association for Financial Professionals (AFP) confers the Certified Cash Manager credential to those with a minimum of 2 years of relevant experience who pass a computer-based exam, and the Certificate in International Cash Management to those who participate in a self-study and examination program. In partnership with the University of Michigan Business School, AFP also offers the Certificate in Finance and Treasury Management, which recognizes professionals who demonstrate competencies in financial and treasury management at the senior level. More recently, the Association of Government Accountants has begun to offer the Certified Government Financial Manager certification to those who have a bachelor's degree, at least 2 years of relevant experience, and who pass three examinations. Financial managers who specialize in accounting may earn the Certified Public Accountant (CPA) or Certified Management Accountant (CMA) designations.
Candidates for financial management positions need a broad range of skills. Interpersonal skills are increasingly important because these jobs involve managing people and working as part of a team to solve problems. Financial managers must have excellent communication skills to explain complex financial data. Because financial managers work extensively with various departments in their firm, a broad overview of the business is essential.
Financial managers should be creative thinkers and problem-solvers, applying their analytical skills to business. They must be comfortable with the latest computer technology. As financial operations increasingly are affected by the global economy, managers must have knowledge of international finance. Proficiency in a foreign language also may be important.
Because financial management is critical for efficient business operations, well-trained, experienced financial managers who display a strong grasp of the operations of various departments within their organization are prime candidates for promotion to top management positions. Some financial managers transfer to closely related positions in other industries. Those with extensive experience and access to sufficient capital may start their own consulting firms.
Job Outlook (Back to Top)
Employment of financial managers is expected to grow about as fast as the average for all occupations through 2010. While mergers, acquisitions, and corporate downsizing will continue to adversely affect employment of financial managers, growth of the economy and the need for financial expertise will ensure job growth. Candidates with expertise in accounting and finance, particularly those with a master’s degree, should enjoy the best job prospects. Strong computer skills and knowledge of international finance are increasingly important; so are excellent communication skills, because financial management jobs increasingly involve working on strategic planning teams.
The banking industry, which employs more than 1 out of 8 financial managers, is expected to continue to consolidate. Employment of bank branch managers, in particular, will grow very little or not at all as banks open fewer branches and promote electronic and Internet banking to cut costs. In contrast, the securities and commodities industry will hire more financial managers to handle increasingly complex financial transactions and manage investments. Financial managers are being hired throughout industry to manage assets and investments, handle mergers and acquisitions, raise capital, and assess global financial transactions. Risk managers, who assess risks for insurance and investment purposes, are in especially great demand.
Some companies may hire financial managers on a temporary basis, to see the organization through a short-term crisis or to offer suggestions for boosting profits. Other companies may contract out all accounting and financial operations. Even in these cases, however, financial managers may be needed to oversee the contracts.
Computer technology has reduced the time and staff required to produce financial reports. As a result, forecasting earnings, profits, and costs, and generating ideas and creative ways to increase profitability will become the major role of corporate financial managers over the next decade. Financial managers who are familiar with computer software and applications that can assist them in this role will be needed.
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