Finance managers manage the money the company earns. They decide where and how to invest it, how to multiply it and how to save it. They evaluate the future implications of financial decisions and monitor the financial health of an organization. Finance Managers also play major roles in creating budgets for an organization and deciding where to allocate the funds. They help raise the money companies need to expand their operations or setup new businesses. They are hired by all types of organizations that include private as well as public companies and are also hired by Non – Governmental Organizations (NGOs). The career can be very well paying and offers great opportunities for growth. The future of this career is very sound as the need for Finance Managers will remain as long as money remains important in life.
What do Finance Managers do?
Finance Managers look after all the financial decisions that an organization makes. They develop strategies and budgets and provide advice to ensure that the organization earns a profit. Their primary task is to use their skills to ensure ways through which the company maximizes its profits and minimizes its costs.
One of the main tasks that Finance Managers perform is to create reports and financial statements. These reports and financial statements can be quarterly, half – yearly, annual or even monthly. The purpose of these reports is to help companies make sound decisions by being informed about the details of the financial health of the organization as well as the outside markets.
Finance Managers are closely involved in analyzing the above reports and using their inferences to come up with sound financial advice. They use these reports to evaluate current financial strategies and decisions and decide what decisions are to be made to maximize profitability in the future.
Another important task that Finance Managers perform is to ensure that the financial activities of the organization do not go against any financial regulations or laws of that particular state/country. They have to find ways through which a company can carry on with its financial activities while complying with these regulations and laws.
Finance Managers are always on the lookout for new opportunities through which the business of the organization can expand. They use their financial acumen and financial skills to make decisions regarding the best ways to invest for the future and new profitable avenues that the company can enter. They are also involve in Equity Research.
Formulating short – term and long – term strategies is a very important part of the job of a Finance Manager. It is extremely important to plan and devise a strategy that would give direction to all the activities of the company. Finance Managers use their sound financial knowledge and understanding of the company’s business to devise a strategy that will not only be profitable, but also have the least amount of risk involved. They also help in creating short – term strategies that help in contributing to the long – term goals of the organization.
Finance Managers are also involved in studying the finance markets continuously and analyzing trends and the activities of their competitors. This is extremely important as the world of finance is constantly changing and knowledge regarding the strategies of your competitors can prove to be a major advantage.
Another important aspect of the job of a Finance Manager is that they are responsible for giving suggestions that would help direct the investments of the company. This means that they advise the management regarding where to invest the funds of the company and in what amounts. They use their knowledge of the current and future market trends to determine the most profitable investments for the organization.
Minimizing Risk is an important task for a Finance Manager as it can help the management make financial decisions more freely. Finance Managers are responsible for evaluating the risk in every financial decision that an organization makes and finding ways through which it can be alleviated or minimized.
Finance Managers are the heads of the finance team of an organization. It is their job to lead and motivate their team of financial analysts and others to perform up to their potential and help the organization function in an economically safe environment. They supervise the actions of their subordinates to ensure that there are no mistakes being made during the creation and analysis of reports.
Finance Managers are also responsible for helping an organization come up with long –term and short – term budgets. They use their financial acumen to come up with a budget that will not only help the company expand, but do so in a safe manner without taking too many risks.
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Types of Finance Managers:
Finance Managers have different job responsibilities depending upon the specific field they work in. There are many types of Finance Managers who specifically look after a particular aspect of Finance in large organizations. Some of them are:
Treasury Managers
They aim to invest and allocate those funds in the right places so as to help the business grow and look for ways through which the financial risk involved can be minimized. One of their primary jobs is to determine the amount of cash or equivalents and organization should have so as to ensure liquidity.
Risk Managers
Risk Managers advise the company regarding the risks involved in investments and other financial activities. It is their job to ensure that the organization performs its financial functions with the minimum amount of risks involved. They are involved in studying and identifying potential risks, and coming up with contingency plans in case the investment does not turn out to be profitable.
Corporate Finance
Corporate Finance is that aspect of finance that deals with deals with arranging and managing funds for an organization. Professionals working in this field analyze the financial structure of companies, and look to increase the value of the shares of the company. They play a major role in managing the funds of an organization and decide how to allocate the resources so that the organization maximizes its gains. Corporate Finance is the ‘financing arm’ of the company and works ‘internally’.
Financial Analysts
Financial Analysts are professionals who analyze the financial aspects of a business and give advice to the owners regarding profitability, growth and costs. They analyze financial statements and other reports in combination with the market conditions to come up with suitable conclusions regarding the present and future of the business. They are also heavily involved in helping people invest their money at the right places.
Controllers
‘Controllers’ are Finance Managers who are specifically responsible for creating and analyzing financial reports and statements like Balance Sheets and analysis of future earnings and expenditure.
Credit Managers
Credit Managers are responsible for giving advice regarding loans a company should take, and from where. They also advice the management regarding when to pay off that credit.
Cash Managers
Cash Managers are specifically responsible for looking after the inflow and outflow of cash and other liquid assets. They ensure that the company has enough cash and liquid assets to handle emergencies and keep the business running smoothly.
How to become a Finance Manager?
To become a Finance Manager, you will have to start off at entry – level positions like financial analysts and then move up the ladder.
Studying subjects like Math and Economics can be big help. You should choose the Commerce stream after your class 10th and study Accountancy, Management, Business and Economics.
Once you complete your schooling, you will have to pursue a Bachelor’s in Commerce or Business Administration. That is enough for entry level jobs in finance, but for jobs at higher positions you will need to have completed an M.B.A in Finance or related fields.
An alternative route to becoming a Finance Manager is by becoming a Chartered Accountant. You can become a Chartered Accountant by completing the CA course offered by the Institute of Chartered Accountants of India (ICAI) only. The course has 3 levels – the Common Proficiency Course, the Integrated Professional Competence Course and the CA Final Course. If you join the course right after school, you will have to complete all three stages. If you join the course after your graduation, you will have to only complete the Integrated Professional Competence Course and the CA Final Course in order to become a Chartered Accountant.
Find out about How to become Chartered Accountant in India.
Experience is absolutely necessary in order to become a Finance Manager. You can gain industry experience by working as a Trainee or an Intern in the finance department of an organization while pursuing your education. The experience you gain at entry level jobs will also be integral to the expansion of your knowledge base in the world of finance management.
Keeping in touch with the all the developments in the field of finance is very important for any aspiring Finance Managers. Study the financial markets and evaluate the rise and falls of stocks and other securities. Research about companies and their portfolios. This will help you build a strong base of knowledge which will assist you while taking important financial decisions.
What are the skills required to become a Finance Manager?
Finance Managers are highly skilled individuals who make very important decisions that impact the present and future of the organization. They need to have great financial acumen and forecasting skills on the basis of which they can make sound financial decisions. They should have the ability to analyze numerical information and draw inferences which are logical beneficial for the organization. They should also have the ability to make sound financial decisions. Finance Managers should have extensive knowledge regarding the rules and regulations that affect the organization’s financial activities. They need to have the ability to solve problems through their knowledge. Finance Managers should constantly research the markets and be on the lookout for opportunities. They should know all about the financial and non financial activities of the organization they work for. They need to have IT skills and should be hard working and determined individuals. They should also have the ability to lead and motivate a team of subordinates and ensure that they perform as per their potential.
Is this the right career for me?
Finance Managers spend their lives working in offices. They usually work for regular hours but might be required to work over time so as to meet deadlines. Their job has a lot of responsibility attached to it as their advice can make or break the financial health of the organization. The job involves constant research and can tend to get monotonous. On the other hand, it is a very well paying job and offers a lot of opportunities for growth.
Finance Management is not the right career for you if you’re not comfortable in dealing with numbers and constant financial research. If you’re looking for adventure and glamour, this is the wrong job. But if your interest lies in working a well paying and financially secure job, and if the world of finance, profits, losses and numbers attracts you, then this can be a great career choice.
