Financial managers play an important role in steering the financial health of organizations by focusing on strategic planning and goal-setting. Their primary focuses include profitability, managing risks and optimizing financial performance. By analyzing financial data and trends, financial managers develop strategies that align with organizational objectives, and focus on long-term stability and growth. Understanding what are the goals of financial managers can help individuals and businesses make informed decisions about financial planning and management.
Are you looking to expand the marketing of your financial advisor practice? Try SmartAssetAMP, a holistic client prospecting and marketing automation platform.
What Is a Financial Manager?
Financial managers are responsible for overseeing the company’s financial activities, including budgeting, forecasting and analyzing financial data. By monitoring financial reports, they help ensure that the company’s finances are on track and that any potential issues are identified and addressed promptly.
In addition to financial oversight, financial managers are tasked with creating and implementing strategies to optimize the company’s financial performance. This includes making decisions about investments, managing cash flow and planning for future financial needs.
Compliance is another critical aspect of a financial manager’s job. They help the company adhere to financial regulations and standards, which can minimize the risk of legal issues.
Financial managers also coordinate with other departments to align financial goals with the overall business strategy, fostering a cohesive approach to the company’s growth and stability.
Duties and Responsibilities of Financial Managers
Here are six primary financial manager duties and responsibilities:
Strategic Planning and Analysis
Strategic planning and analysis involves developing long-term goals and strategies for an organization, conducting market and competitive analyses, assessing internal capabilities, and helping align resources and initiatives with the company’s objectives to drive sustainable growth and success.
Budgeting and Cost Control
Managing budgets is another key responsibility. Financial managers develop and oversee budgets so that resources are allocated efficiently. They monitor spending to identify cost-saving opportunities, which can help the company operate within its financial limits and maximize profitability.
Investment Management
Financial managers evaluate potential investments to determine their viability and potential returns. This may include managing the company’s investment portfolio, balancing risk and seeking opportunities to enhance the company’s financial position.
Risk Management
Financial managers assess potential risks related to financial transactions and market fluctuations, implementing strategies to protect the company’s assets. This proactive approach aims to minimize losses and safeguard the company’s financial stability.
Financial Reporting and Compliance
Financial managers may be tasked with preparing detailed reports on the company’s financial status, which are used by executives and stakeholders to make informed decisions. They also may be responsible for helping a company maintain compliance with financial regulations and standards, maintaining transparency and integrity in financial operations.
Performance Monitoring
Financial managers track key performance indicators (KPIs) and analyze variances from budgeted figures. This continuous monitoring allows them to make adjustments as needed, so that the company remains on track to meet its financial goals.
What Skills Do Financial Managers Need?
Financial managers typically rely on a variety of both technical skills and soft skills to carry out their duties. Here’s a look at the primary skills that financial managers need:
Financial Data Analysis
Financial managers must be proficient in financial data analysis to interpret financial statements and forecasts accurately. This skill allows them to assess the financial health of their organization and make informed decisions based on quantitative data.
Financial Software
Proficiency in financial software is another key technical skill for financial managers. They should be adept at using tools such as Excel, QuickBooks, and enterprise resource planning (ERP) systems. These tools help streamline financial processes and improve accuracy in reporting and analysis.
Regulatory Knowledge
In order to fulfill compliance responsibilities, financial managers may need a thorough understanding of the regulatory environment. Staying updated with laws and regulations can help the organization adhere to financial standards and avoids legal issues.
Communication and Presentation Skills
While not purely technical, strong communication and presentation skills are indispensable. Financial managers must be able to explain complex financial concepts to stakeholders who may not have a financial background. Clear and effective communication aids in decision-making and fosters trust within the organization.
Leadership Skills
Financial managers often lead finance teams and collaborate with other departments to achieve organizational goals. Leadership skills are essential for motivating team members, managing conflicts and driving performance.
How Much Do Financial Managers Make?
According to the latest data from the Bureau of Labor Statistics (BLS), the median annual wage for financial managers in May 2023 was $156,100. This figure, however, can vary significantly based on factors such as industry, location and experience level. For example, the top 10% of financial managers earn more than $239,000 while the bottom 10% earn just under $83,000.
The median salary of financial managers working in professional, scientific and technical services is $169,860 per year, according to the May 2023 data. In contrast, financial managers in government roles tend to earn less, with median salaries of around $129,850.
Geographic location also influences earnings, with financial managers in metropolitan areas typically earning more than those in rural settings.
Bottom Line
Financial managers interpret financial data, manage investments and mitigate risks by crafting strategies that align with organizational goals and foster long-term growth. They also help maintain compliance with regulatory standards and optimize resource allocation.
Tips for Growing a Financial Advisory Business
- Whether you’re looking for someone to oversee financial management or work directly with clients, hiring new talent is one way to potentially grow your advisory business. If you need to expand your advisory team, here are some tips and strategies on how to recruit the right financial advisors for your firm.
- Adding new clients and increasing assets under management are obvious ways to grow your business. But marketing takes time and effort. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
Photo credit: ©iStock.com/andreswd, ©iStock.com/Ridofranz, ©iStock.com/Tashi-Delek