Job Responsibilities of Finance Manager
A financial manager is a pivotal element in a corporation's accounting and financial reporting processes. A manager typically ensures that corporate operating data is accurate and conforms to professional standards, industry practices and regulatory guidelines. Top management also relies on financial managers to help analyze accounting data and provide recommendations for improvements in nonperforming areas.
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Function
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A financial manager ensures that a firm prepares and reports financial statements in accordance with generally accepted accounting principles (GAAP), regulatory guidelines and professional standards. A manager also ensures that these statements are "fair" and complete ("fair" means correct in accounting parlance). Complete financial records include balance sheet, statement of profit and loss (also known as P&L), statement of cash flows and statement of retained earnings (also called statement of shareholders' equity).
Types
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A financial manager's roles may vary, depending on the industry, the company and staff skills. A manager may supervise the accounting department's activities and ensure that financial statements are correct and complete. A senior financial analyst may help a corporation's top leadership evaluate operating data, compare current versus historical information and detect nonperforming areas. A corporate finance specialist may analyze an organization's funding sources and help it raise cash on securities exchanges.
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Features
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Professional backgrounds in the financial management field may vary. Some managers have a public accounting affiliation and hold certified public accountant (CPA) licenses. Others come from private practice and may hold certified financial manager (CFM), chartered financial analyst (CFA) or financial risk manager (FRM) designations. Tax managers who help corporations abide by fiscal laws and regulations may hold Enrolled Agent (EA) certificates from the Internal Revenue Service (IRS). Risk managers who identify and monitor risks implicit in corporate transactions may have scientific backgrounds.
Expert Insight
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Occasionally, a department head who wants to implement a new finance procedure may find that no employee has practical experience in an area. In these cases, he may bring in a finance manager to explain the difficult topic and clarify the complexities. For example, say a senior risk director at a large investment bank wants to establish reporting procedures in global stock and bond transactions. She may ask a manager in the accounting department to clarify the topic and explain how International Financial Reporting Standards (IFRS) differ from GAAP.
Misconceptions
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A finance manager is not a business manager. A finance manager helps an organization record, analyze and report accounting data that conforms to laws and regulations. A business manager coordinates all activities within a segment or business unit and ensures that the firm meets performance goals. Simply put, a business manager may use information that a finance manager provides, but his responsibilities may involve other areas such as marketing, sales and purchasing.
Salary and Career Growth
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Salary levels for finance managers depend on seniority, length of service and academic or professional credentials. The Bureau of Labor Statistics reports that median wages of finance managers were $99,330 in May 2008, excluding annual bonuses and stock options, with the middle 50 percent earning from $72,030 to $135,070. An undergraduate finance manager can increase his chances of promotion by seeking a CPA license or a master's of business administration in finance or investment analysis. A competent finance manager typically moves to a senior role after three to five years.
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References
- Photo Credit photo checkbox finance 1 image by Aleksandar Radovanovic from Fotolia.com
