In today’s dynamic and complex financial landscape, the role of a financial manager has become increasingly crucial. Whether you’re a finance enthusiast looking to pursue a rewarding career or a seasoned professional seeking advancement, this comprehensive guide will provide valuable insights and actionable steps on how to embark on the path to becoming a successful financial manager.
Financial Manager Salary
A financial manager’s salary can vary a great deal depending on the amount of experience that you have, the size of the company that you work for, or the amount of money that you are responsible for managing. According to Glassdoor, Financial Manager Salaries in the United States can be summarized as follows:
- Entry Salary (US$70k)
- Median Salary (US$90k)
- Executive Salary (US$145k)
When comparing it to the average salary across all occupations in the United States, which the Bureau of Labor Statistics estimates is US$ 61,900, we can see that Financial Managers earn a relatively high salary.
What does a Financial Manager do?
A financial manager’s primary responsibility is to ensure the efficient and effective management of an organization’s financial resources. This involves tasks such as creating financial strategies, analyzing financial data, preparing financial reports, monitoring budgets, making investment decisions, and advising senior management on financial matters.
Financial managers also play a crucial role in risk management, ensuring compliance with financial regulations, and developing long-term financial plans to support the organization’s growth and profitability.
Financial Manager Career Progression
- Financial Analyst/Assistant: In these entry-level roles, your duties may involve conducting financial analysis, preparing reports, assisting in budgeting processes, and supporting senior financial professionals.
- Staff Accountant: This role focuses on maintaining financial records, preparing financial statements, managing accounts payable and receivable, and assisting with tax filings. You will gain foundational knowledge in accounting principles and financial reporting.
- Senior Financial Analyst: As a senior financial analyst, you are responsible for conducting complex financial analysis, forecasting, budgeting, and providing strategic recommendations based on their findings.
- Finance Manager: Finance managers are responsible for budgeting, financial planning, financial reporting, and monitoring key performance indicators. They may supervise a team of financial analysts and work closely with senior management to develop financial strategies.
- Financial Controller: You will oversee the entire accounting and financial operations of an organization. You need to ensure accurate financial reporting, compliance with regulations, and implementation of financial controls and will collaborate closely with executives.
- Director of Finance: In this leadership position, you are responsible for developing financial strategies, managing financial risks, overseeing budgeting and forecasting processes, and providing guidance on major financial decisions.
- Chief Financial Officer (CFO): At the executive level, the CFO is the highest-ranking financial professional within an organization. CFOs provide financial leadership, manage relationships with investors and financial institutions, and ensure the organization’s financial sustainability and growth.
- Variety and challenge
- Impactful decision-making
- Leadership and influence
- Professional growth opportunities
- Competitive compensation and job stability
- High-pressure environment
- Long working hours
- Accountability and risk
- Continuous learning and adaptation
- Complex financial regulations
Useful Skills to Have as a Financial Manager
- Financial Analysis and Interpretation
- Strategic Thinking
- Risk Management
- Communication and Presentation
- Leadership and Team Management
Popular Financial Manager Specialties
- Investment Manager
- Risk Manager
- Financial Planning and Analysis Manager
- Treasury Manager
- Corporate Finance Manager
How to become a Financial Manager
Becoming a financial manager typically involves a series of steps that include acquiring the necessary education, gaining relevant work experience, and continuously developing professional skills. Here are some common steps to becoming a financial manager:
Obtain a Bachelor’s Degree in Finance, Accounting or Economics
The first step to consider when trying to become a financial manager is a bachelor’s degree in a field related to financial management. The most common degrees to consider are Finance, Accounting, and Economics. However, other degrees may also allow you to enter the field as long as the coursework covers financial management, accounting principles, investment analysis, and financial markets.
Do I Need a Degree to Become a Financial Manager?
While a degree is not always mandatory, having a relevant bachelor’s degree is typically the standard educational requirement for becoming a financial manager. Most employers prefer candidates with a strong educational background in finance, accounting, economics, or a related field.
In some cases, extensive work experience or professional certifications may be considered in lieu of a degree. You may enter financial management roles through a combination of relevant work experience, industry certifications, and demonstrated expertise in the field.
Why is it Important to Get a Degree in Financial Management?
Getting a degree in financial management is important for several reasons:
- A degree program equips you with a strong foundation of knowledge in areas such as financial analysis, investment management, risk assessment, and strategic financial decision-making. This knowledge is invaluable for understanding the complexities of financial management roles.
- A degree in financial management enhances your professional credibility. It demonstrates to potential employers and colleagues that you have received formal education and training in the field. Employers often value candidates with relevant degrees as they can be confident in the candidate’s understanding of financial principles and their ability to apply them in real-world scenarios.
- Many financial management positions, especially those at a managerial or executive level, often require a degree as a minimum qualification. Having a degree in financial management can open doors to a wider range of career opportunities and increase your chances of securing higher-level roles. It provides a competitive edge in a field where education is highly valued.
- Pursuing a degree in financial management provides you with opportunities to network with faculty, industry professionals, and fellow students. These connections can lead to valuable mentorship, internships, job referrals, and other career advancement opportunities.
How Long Does it Take to Get a Degree in Financial Management?
The time it takes to earn a degree in a field related to financial management can vary depending on several factors. Here are some general guidelines for the time it takes to complete different types of financial management degrees:
- Bachelor’s Degree: A bachelor’s degree in financial management typically takes around four years of full-time study to complete. You can decrease the amount of time required by entering an accelerated program, or taking additional credits wherever possible.
- Master’s Degree: A master’s degree in financial management or a related field can typically be completed in one to two years of full-time study. However, the specific duration can vary depending on the program’s structure and whether you are enrolled on a full-time or part-time basis.
- Combined Bachelor’s and Master’s Programs: Some universities offer combined bachelor’s and master’s programs in financial management, allowing you to earn both degrees in a condensed time frame. These programs typically take five years to complete, and you will start graduate-level coursework during your undergraduate studies.
How Much Does it Cost to Study Financial Management at a University?
The cost of studying financial management at a university can vary significantly depending on various factors. Additionally, you should not only consider the cost of tuition, but also your living expenses, textbooks, and other educational materials.
According to Best Accredited Colleges, you can expect to pay roughly US$ 9,946 per year to study a Bachelor’s degree in Finance in-state. When studying out-of-state, the yearly cost increases to an average of US$ 24,133.
Can I Become a Financial Manager Through Online Education?
Yes, you can become a financial manager through online education. Due to the highly theoretical nature of finance and economics, you may be able to take many of your classes online, or even your entire bachelor’s degree.
This is a more practical option for some people, who require additional flexibility in their schedule or can benefit from the decreased cost of an online education.
However, it is just as important to make sure that you choose a good school and accredited program when studying online as it is when studying in person. You should also keep in mind that you may not have the opportunities for networking that you would otherwise.
What are Some Web Resources to Learn Skills to Become a Financial Manager?
There are several reputable web resources available to learn skills and enhance knowledge related to becoming a financial manager. Here are some valuable web resources that can provide educational content, industry insights, and skill-building opportunities:
- Investopedia: Investopedia is a comprehensive online resource for financial education. It offers a wide range of articles, tutorials, videos, and quizzes covering various financial topics, including financial management, investment strategies, risk management, and financial analysis.
- Financial Times: Financial Times is a renowned global business and financial news organization. Its website offers a range of articles, reports, and analyses on financial management, industry trends, and market insights. Subscribing to Financial Times provides you with access to in-depth articles and resources that can enhance your understanding of financial management principles and practices.
- Corporate Finance Institute: The Corporate Finance Institute offers a wide range of online courses and resources covering various aspects of finance and financial management. They provide courses on financial analysis, budgeting and forecasting, investment banking, and corporate finance, among others. Their courses are designed to be practical and industry-focused.
- CFA Institute: The CFA Institute is a globally recognized organization for investment professionals. While primarily known for its Chartered Financial Analyst (CFA) program, the institute also provides a range of educational resources and articles on financial management, investment analysis, and portfolio management.
Gain Work Experience as a Financial Manager
Entry-level positions in finance, such as financial analyst or assistant roles, provide valuable experience and exposure to financial management. This practical experience allows you to develop a solid foundation in financial analysis, reporting, and decision-making.
In order to minimize the amount of time it takes you to enter the field and progress, consider an internship while you study.
What Are Internship Opportunities For Aspiring Financial Managers?
Internship opportunities for financial managers can vary depending on the industry, company size, and location. Here are some common internship opportunities that can provide valuable experience and exposure to the financial management field:
- Financial Analyst Intern: Many companies offer internships specifically focused on financial analysis. As a financial analyst intern, you would work closely with finance teams to gather and analyze financial data, assist in financial forecasting and budgeting, conduct market research, and support financial reporting activities.
- Investment Banking Intern: Investment banks often offer internship programs for individuals interested in financial management roles. These internships typically involve assisting with financial modeling, conducting industry research, analyzing investment opportunities, and supporting deal execution under the guidance of experienced professionals.
- Corporate Finance Intern: Corporate finance internships provide exposure to financial management within a specific company. As a corporate finance intern, you may assist with financial planning and analysis, cash flow management, risk assessment, capital budgeting, and financial reporting activities within the organization.
- Treasury Management Intern: Treasury management internships focus on understanding and managing a company’s financial assets and liabilities. You may work on cash management, liquidity analysis, risk management, foreign exchange operations, and other treasury-related tasks.
- Financial Planning and Wealth Management Intern: Internships in financial planning and wealth management offer exposure to personal financial management and advisory services. You may assist in creating financial plans, analyzing investment portfolios, conducting client meetings, and gaining knowledge of financial products and strategies.
What Skills Will I Learn as a Financial Manager?
As a financial manager, you will develop a wide range of skills that are crucial for effectively managing financial operations and making strategic decisions. Here are some key skills you can expect to learn and enhance in the role of a financial manager:
- Financial Analysis: Financial managers need strong analytical skills to evaluate financial data, identify trends, and make informed decisions. You will learn to assess financial statements, analyze profitability, liquidity, and solvency ratios, and interpret financial performance indicators.
- Budgeting and Forecasting: You will learn how to create budgets, forecast financial outcomes, monitor variances, and make adjustments as needed to ensure financial goals are met.
- Financial Reporting: Financial managers are responsible for preparing and presenting financial reports to stakeholders, including executives, shareholders, and regulatory bodies. You will learn to effectively communicate financial information, ensure compliance with reporting standards, and provide insights to support decision-making.
- Risk Management: Financial managers must assess and manage financial risks to protect the organization’s assets and optimize returns. You will learn to identify and evaluate risks, develop risk mitigation strategies, and implement internal controls to safeguard financial resources.
- Strategic Planning: You will learn to align financial goals with the overall strategic objectives of the company, evaluate investment opportunities, assess the financial feasibility of projects, and provide financial insights to support long-term planning.
- Leadership and Team Management: Financial managers often lead finance teams and collaborate with professionals from other departments. You will develop leadership skills to effectively manage teams, delegate tasks, provide guidance, and foster a collaborative work environment.
- Financial Technology (Fintech): As technology continues to reshape the finance industry, financial managers need to stay updated on financial technology trends and tools. You will learn to leverage financial software, data analytics, and automation tools to streamline processes, enhance efficiency, and support decision-making.
- Ethical and Legal Compliance: Financial managers must adhere to ethical standards and comply with relevant financial laws and regulations. You will develop an understanding of ethical considerations, corporate governance principles, and legal requirements to ensure financial practices are conducted in a responsible and compliant manner.
Consider Professional Certifications
While not mandatory, earning professional certifications can enhance career prospects and demonstrate expertise in the field. Certifications such as Chartered Financial Analyst (CFA) or Certified Treasury Professional (CTP) can be pursued to validate skills and knowledge.
Is It Difficult to Get a CFA Certification?
Yes, obtaining the Chartered Financial Analyst (CFA) certification is widely regarded as a challenging endeavor. The CFA program is known for its rigorous curriculum and comprehensive exams, designed to assess your knowledge and competence in various areas of finance. Here are some factors that contribute to the difficulty level of obtaining the CFA certificate:
- Extensive Curriculum: The CFA program covers a wide range of topics, including economics, financial reporting and analysis, corporate finance, portfolio management, equity investments, fixed income, derivatives, and more.
- Three Levels of Exams: The CFA program consists of three levels of exams, namely Level I, Level II, and Level III. The exams are known for their complexity and require you to have a comprehensive understanding of the concepts, as well as the ability to apply them in practical scenarios.
- High Pass Standards: The pass rates for each level are historically low, and you need to achieve a strong score to successfully pass. It requires diligent preparation, extensive studying, and a solid grasp of the material to meet the required standards.
- Time Commitment: You are recommended to dedicate several hundred hours of study for each level, spread over several months. Balancing work or other commitments alongside the intensive study schedule can be challenging.
- Professional Experience Requirement: In addition to passing the exams, you must also fulfill a minimum of four years of relevant professional work experience to obtain the CFA charter. This requirement adds an additional layer of commitment and qualification beyond the exams themselves.
Is It Difficult to Get a CTP Certification?
While the Certified Treasury Professional (CTP) certification is a significant achievement in the field of treasury management, it is considered to be less challenging compared to certifications such as the Chartered Financial Analyst (CFA). Here are some factors that can help you understand the difficulty level associated with obtaining a CTP certificate:
- Targeted Curriculum: The CTP certification focuses specifically on treasury management and related areas, including cash management, risk management, working capital management, capital markets, and financial analysis. The curriculum is more specialized compared to broader finance certifications, making it more manageable to study and grasp the content.
- Single-Level Exam: The CTP certification program involves a single-level exam that tests your knowledge and understanding of treasury management concepts. This eliminates the multi-level exam structure found in some other certifications and allows you to focus your efforts on preparing for a single exam.
- Professional Experience: To be eligible for the CTP certification, you must have a minimum of two years of professional experience in a treasury-related role. This requirement ensures that you have practical knowledge and exposure to treasury management practices, which can help in preparing for the exam.
- Exam Preparation Resources: The Association for Financial Professionals (AFP), which administers the CTP certification, provides you with study materials, practice exams, and other resources to aid in exam preparation. These resources can be beneficial in guiding you through the exam content and increasing your chances of success.
Pursue Advanced Education (Optional)
You may choose to pursue a master’s degree in finance, business administration (MBA), or a related field to gain advanced knowledge and increase your marketability. Advanced degrees can provide a competitive edge and open doors to higher-level positions.
Stay Updated and Adapt
The financial industry is constantly evolving, so it’s crucial to stay informed about the latest trends, regulations, and technologies. Engage in continuous learning, attend relevant seminars or workshops, and stay updated on industry publications and news.
What’s the Career Outlook for Financial Manager?
The career outlook for financial managers in the USA has been generally positive, with steady growth projected in the field. According to the U.S. Bureau of Labor Statistics (BLS), the employment of financial managers is projected to grow by 17% from 2021 to 2031, which is much faster than the average for all occupations.
What are the Job Opportunities of a Financial Manager?
As a financial manager, you will have a wide range of job opportunities across various industries and organizations. Here are some common job opportunities for financial managers:
- Finance Manager: This is the most common job title for financial managers. You will oversee the financial operations of an organization, including budgeting, financial planning and analysis, financial reporting, and risk management. You will play a strategic role in making financial decisions to support the overall goals of the company.
- Controller: Controllers are responsible for managing the accounting and financial reporting functions of an organization. You will ensure accurate financial records, compliance with accounting standards, and timely financial reporting. Controllers often supervise accounting teams and collaborate with other departments to support financial decision-making.
- Treasurer: Treasurers focus on managing an organization’s financial assets, cash flow, and liquidity. In this position, you will be required to develop and implement strategies to optimize cash management, evaluate investment opportunities, manage debt and financing, and assess and mitigate financial risks.
- Risk Manager: Risk managers specialize in identifying, assessing, and managing financial risks faced by an organization. As a risk manager, you will analyze market trends, evaluate the impact of potential risks, develop risk mitigation strategies, and oversee insurance and risk management programs.
- Credit Manager: Credit managers focus on evaluating and managing an organization’s credit risk. As a credit manager, your role is to assess the creditworthiness of customers, establish credit policies, monitor credit limits, and ensure timely collections. You will also work closely with sales and finance teams to balance risk and revenue generation.
- Financial Planning and Analysis (FP&A) Manager: FP&A managers are responsible for financial planning, forecasting, and analysis within an organization. As a financial planning and analysis manager, you will develop financial models, analyze financial data, provide insights on financial performance, and support budgeting and strategic planning processes.
- Investment Manager: Investment managers oversee investment portfolios, including stocks, bonds, and other assets. You will need to analyze market trends, evaluate investment opportunities, develop investment strategies, and monitor the performance of investments to optimize returns.
- Financial Consultant: Financial consultants provide advisory services to individuals or organizations on financial matters. Your role will include assessing financial needs, developing financial plans, offering investment advice, and providing guidance on financial management strategies.
- CFO (Chief Financial Officer): CFOs are top-level executives responsible for overseeing an organization’s overall financial strategy and operations. They provide leadership and guidance to financial teams, collaborate with other executives on strategic decisions, and ensure financial stability and growth.
What Type of Companies Hire a Financial Manager?
Financial managers are in demand across various types of companies and organizations. Here are some examples of the types of companies that commonly hire financial managers:
- Large Corporations: Large corporations in industries such as manufacturing, technology, finance, retail, and healthcare often have dedicated financial management teams. These companies may hire you to oversee financial operations, provide strategic guidance, and ensure regulatory compliance.
- Financial Institutions: Banks, investment firms, insurance companies, and other financial institutions hire financial managers such as yourself to manage their financial operations, risk management, investment portfolios, and regulatory compliance. These roles may include positions such as finance managers, risk managers, investment managers, or financial analysts.
- Consulting Firms: Management consulting firms often have financial management divisions that provide financial advisory services to clients. In these consulting firms, you may work on projects related to financial analysis, restructuring, mergers and acquisitions, or strategic financial planning for clients across various industries.
- Small and Medium-sized Enterprises (SMEs): Financial managers are valuable assets for small and medium-sized enterprises that may not have dedicated finance departments. You will need to handle financial planning, budgeting, cash flow management, financial reporting, and other financial functions critical to the success and growth of the organization.
- Professional Service Firms: Accounting firms, law firms, and other professional service firms require financial managers to manage their financial operations, financial planning, billing, and client accounting. In these firms, you may also support partner compensation and financial performance analysis.
- Government Agencies: Local, state, and federal government agencies employ financial managers to oversee financial operations, budgeting, grants management, and compliance with financial regulations. These roles may be found in agencies responsible for finance, treasury, budgeting, or economic development.
What is the Work-Life Balance of a Financial Manager?
Your work-life balance as a financial manager can vary depending on factors such as the industry, company culture, specific job responsibilities, and personal preferences.
Generally, financial managers work full-time, and your work hours can extend beyond the standard 9-to-5 schedule. You will often face demanding workloads, especially during critical periods such as budgeting cycles, financial reporting deadlines, or major business transactions. During these periods, longer hours and an increased workload may be required from you. However, outside of these peak times, work hours may be more manageable.
Some financial management roles offer flexibility in terms of work hours and remote work arrangements. Depending on the organization and job requirements, you may have the opportunity to negotiate flexible work options, which can contribute to a better work-life balance.
Should I become a Financial Manager?
The decision to pursue a career as a financial manager ultimately depends on your interests, skills, and long-term goals. As a financial manager, you will have the opportunity to work in a dynamic field, make strategic financial decisions, and contribute to the financial success of organizations.
The role offers competitive salaries, opportunities for career growth, and a chance to develop a diverse set of skills in areas such as financial analysis, budgeting, risk management, and strategic planning.
However, it is important to consider the challenges that come with the role, such as demanding workloads, high levels of responsibility, and the need to stay updated on evolving financial regulations and technologies.
If you have a passion for finance, strong analytical abilities, and a desire to play a critical role in shaping the financial future of companies, a career as a financial manager can be rewarding.