How to Become a Finance Manager

Financial managers are the finance professionals responsible for overseeing the financial well-being of big companies and government agencies. As you might imagine, it’s a critical role. Finance managers don’t just track cash flows and produce financial reports. They also:

• Create profit projections on which future business strategies are based
• Find ways to increase revenues
• Deal with tax audits and regulatory compliance
• Manage everything from a company’s investments to its internal financial controls

For this, financial managers are paid very well, which makes it all the more surprising that one can land this job with nothing more than a bachelor’s degree and the right experience. That may be why US News & World Report put financial manager in the fifth spot on its list of the best business jobs.

Intrigued? In this article about how to become a finance manager, we cover:

• What is a finance manager, and what do they do?
• Where do financial managers work?
• What are the skills necessary to become a finance manager?
• What is the best degree path to becoming a finance manager?
• Are there different types of finance managers?
• How long does it take to become a finance manager?
• What is the potential salary of a finance manager?
• Why should you consider a career as a finance manager?

What is a finance manager, and what do they do?

There was a time when finance managers spent the majority of their time monitoring and reporting on a company’s finances. Advances in technology have significantly decreased the amount of time it takes to generate reports, so these days, financial managers do a lot more data analysis and forecasting. They still look after the financial health of businesses and play an essential role in helping organizations meet short- and long-term financial goals. However, they’re now more involved in directing the financial activities of those organizations.

At some companies, finance managers do work very similar to that of financial advisors, risk managers, financial analysts, and accounting managers. At others, they may be entirely focused on raising and managing funds.

In general, though, a financial manager will be responsible for the following:

• Analyzing market trend to maximize profits
• Building financial models
• Coordinating finances among departments
• Creating an effective internal control of funds
• Creating checks and balances in internal controls
• Determining capital structures
• Distributing profit and surplus funds
• Finding ways to minimize finance costs
• Maintaining proper cash flow
• Managing payables and receivables
• Monitoring financial transactions to ensure legal compliance
• Moving unused funds into investments
• Negotiating extended credit periods with credit managers and loan officers
• Overseeing the company’s financial planning strategy
• Paying creditors
• Performing financial analysis
• Raising and arranging funds
• Reviewing and reporting on all transactions in a given period
• Working closely with the chief financial officer

The size of an organization can sometimes determine the financial management role. At smaller companies, finance managers can serve the same function as chief financial officers, handling everything from investment planning to asset management to P&L reporting. Companies with less complex financial needs may have one employee who serves as a hybrid financial manager, accountant, asset manager, and corporate financial planner. Larger organizations that employ more financial professionals may have multiple financial managers on staff, each of whom is focused on a single element of financial planning (e.g., financial accounting, fiscal policy, asset management, acquisition, or forecasting).

Financial management is an evolving discipline, so the list of what a finance manager does may look very different in five or even two years. Globalization, privatization, new technologies, and other factors that impact how companies do business will change this role. If you decide to become a financial manager, be ready to pivot.

Where do financial managers work?

Financial managers work in every industry and in government agencies, too. You can find these financial professionals in almost all firms and organizations, not just banks, investment firms, and insurance companies. Most financial managers work in finance and insurance, but there are finance managers in manufacturing businesses, hotels, colleges and universities, retail companies, scientific research labs, technology firms, and the arts.

In most of these settings, financial managers work full time, and they often put in more than 40 hours per week. Not all finance managers have to travel, but some do—particularly those who work for finance and accounting firms that serve clients.

What are the skills necessary to become a finance manager?

Finance professionals across the board need to have strong math skills and be comfortable using technology. However, an analytical mind isn’t enough when your goal is to become a financial manager. You also have to be relatively assertive, extroverted, optimistic, and curious. This isn’t a job for the timid or anyone who wants to crunch numbers behind a desk. Financial managers have to work closely with a lot of people, from data analysts to insurance managers to top-level executives. In this role, you might manage an entire department of people who all look to you for guidance and direction.

The skills necessary to become a finance manager include:

• Analytical skills
• Communication skills
• Decision-making skills
• Interpersonal skills
• Leadership skills
• Management skills
• Presentation skills
• Problem-solving skills
• Organization skills
• Time management skills

The most successful financial managers tend to be:

• Able to identify smart investments
• Calm and able to resolve conflicts
• Good at balancing budgets
• Interested in finance and accounting theory
• Naturally good with numbers
• Perfectionists who are quickly able to spot errors
• Self-motivated and willing to work hard
• Capable leaders who can motivate others
• Well-versed in the latest financial rules and regulations

What is the best degree path to becoming a finance manager?

There was a time when it was relatively easy to become a financial manager with a bachelor’s degree in finance, a bachelor’s degree in accounting, a business administration degree, or a bachelor’s degree in economics. Now, however, more employers require candidates for financial management positions to have a master’s degree in finance, a master’s degree in accounting, or an MBA in finance. That’s because the role involves so much more technical financial analysis, financial risk analysis, and strategic business planning.

Studying finance is probably your best bet if your goal is to become a finance manager. Note that programs vary widely by school, regardless of the highest level of education you pursue. Make sure you read program guides carefully to be sure that the bachelor’s degree program and/or master’s degree program you choose offers opportunities to study topics like:

• Banking
• Corporate financial accounting
• Corporate financial analysis
• Economics for managers
• Financial accounting
• Financial reporting
• Financial theories
• Global finance
• Investing
• Managerial finance
• Portfolio management
• Risk management
• Wealth management

According to US News & World Report, the top colleges and universities for finance are:

• Columbia University
• Duke University
• Harvard University
• New York University
• Santa Clara University
• Stanford University
• University of California – Berkeley
• University of Chicago
• University of Michigan – Ann Arbor
• University of Pennsylvania

Some employers require their financial managers to be Certified Public Accountants (CPAs) and/or Certified Financial Analysts (CFAs), while others don’t. You might not necessarily have to be a CPA or CFA to find work as a finance manager, but having credentials like these should make it easier to land higher-paying positions. That’s especially true if you don’t have a master’s degree and you’re trying to advance into financial management from an analyst or planning position.

Are there different types of finance managers?

You already know that finance managers at different organizations may have very different responsibilities. Sometimes they also have different titles. At some companies, financial manager is an umbrella term that encompasses financial controllers, credit managers, cash managers, risk and insurance managers, and other senior finance professionals. The reason there are different types of finance managers is that larger companies tend to employ multiple financial managers who specialize in different areas of corporate finance.

• Branch managers are finance managers who work in banking and oversee operations in one branch office. They help set financial goals, develop strategies to increase business and revenue, handle credit management, and manage personnel.
• Cash managers monitor the flow of liquid funds and oversee cash receipts and disbursements. Their job is to forecast whether a company will have a shortfall and need a loan or whether they have more liquid assets than necessary, thereby facilitating investments.
• Controllers are responsible for directing the preparation of financial reports like income statements, balance sheets, and expense reports. A financial controller may manage the auditing, accounting, and budgeting departments.
• Credit managers oversee everything related to credit standards at a company. They develop the company’s credit rating criteria, determine credit ceilings, and monitor collections on past-due accounts.
• Risk managers are responsible for developing and leveraging strategies that limit—or even entirely mitigate—risks that might cause financial losses. They look for financial uncertainties related to everything from natural disasters to commodity price changes.
• Treasury and finance officers manage an organization’s budget and make whatever adjustments are necessary for the organization to meet its financial goals. They may also raise capital, oversee investment funds, and develop plans to ensure that mergers and acquisitions are profitable.

How long does it take to become a finance manager?

It can take upwards of eight years to become a finance manager. Most financial managers take four years to earn a bachelor’s degree—often a finance degree—and then go on to amass two or more years of work experience in the field. An aspiring finance manager might work as an auditor, loan officer, accountant, or financial analyst during that time, and pursue professional certifications in their off-hours after graduating with a BS in Finance.

At that point, an aspiring financial manager might decide to go back to school to pursue a master’s degree in finance, which could take two years of full-time study, or three or more years if they’re enrolled as a part-time student. Having certifications and an advanced degree doesn’t guarantee job offers, however. They may have to spend a few more years in mid-level finance positions before landing this job.

What is the potential salary of a finance manager?

Corporate finance is a lucrative field, and financial managers are well paid for what they do. According to the US Bureau of Labor Statistics (BLS), the median annual wage for financial managers is $127,990 (with the lowest-paid 10 percent earning less than $67,620 and the highest-paid 10 percent earning more than $208,000).

There’s no way to know how much you’ll earn when you become a finance manager. Your level of education, training, and experience will all play a role in your earning potential, as will your location, the size of the company you work for, and your responsibilities. Some financial managers receive bonuses, benefits, commissions, and other forms of compensation, and these aren’t always reflected in the averages published by agencies like the BLS. What we do know is that some industries pay finance managers more than others. You’ll probably make more than your colleagues in other fields if you find work in professional, scientific, and technical services or in the management of companies and enterprises.

Why should you consider a career as a finance manager?

The obvious answer is that the pay is good. There are higher-paid roles in finance, but not all of them are ranked as highly when it comes to job satisfaction and quality of life.

Now, it’s true that financial managers are often under a lot of stress because these professionals are responsible for keeping an entire organization’s finances in order. If a company doesn’t meet its financial goals, the finance manager is going to get the blame. It’s also a tough job, with a lot of duties, and finance managers have to abide by some pretty strict regulations.

On the flip side, you might work more than 40 hours per week in this role, but chances are that you won’t be routinely pulling 80-hour weeks. There’s a lot of flexibility and room to grow, and there are multiple career options for professionals with the qualifications necessary to become finance managers. Most importantly, this is a role that comes with some serious job security. Employment of financial managers in the US is projected to grow 16 percent in the next 10 years, which is much faster than the national average for all occupations.

So, while this might not be the sexiest job out there, financial manager is a role with a lot going for it. If you are interested in finance, good with numbers, and ready to work hard, you might just make it into that top-earning 10 percent.

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