Nearly all firms, government agencies, and organizations have at least one financial manager to supervise the preparation of financial reports, guide investment activities, and execute cash-management strategies. Since computers can very efficiently record and organize data, financial managers spend much time developing strategies to help the organization realize its long-term goals.
Financial managers’ responsibilities vary according to position. Specific titles include controller, treasurer or finance officer, credit manager, cash manager, and risk and insurance manager. Controllers prepare special reports as required by regulatory authorities and oversee the preparation of financial reports, such as income statements, balance sheets, and analyses of future earnings or expenses, which describe and predict the organization’s financial position. In many firms, controllers supervise the accounting, audit, and budget departments.
Treasurers and finance officers direct an organization’s budgets and financial objectives by overseeing the investment of funds and managing associated risks, supervising cash management activities, addressing mergers and acquisitions, and implementing capital-raising strategies to sustain a firm as it expands. Credit managers supervise a firm’s issuance of credit by establishing credit-rating criteria, determining credit ceilings, and monitoring collection of unsettled accounts. Financial and accounting systems for the banking transactions of multinational organizations are developed by managers who specialize in international finance.
Cash managers help firms meet their business and investment needs by monitoring and controlling the flow of cash receipts and disbursements. Cash flow projections are essential to determining whether a firm needs loans to meet cash requirements and deciding how a firm should invest surplus cash. Risk and insurance managers, in addition to managing a firm’s insurance budget, direct programs to minimize potential risks and losses from a firm’s financial and business operations.
Financial institutions—commercial banks, savings and loan associations, credit unions, mortgage and finance companies, and the like—also employ financial managers. Depending on their area of specialty, these employees’ duties include lending, trusts, mortgages, investments, and various programs, including sales, operations, or electronic financial services. In some firms, these managers might also solicit business, authorize loans, and direct the investment of funds, making sure always to follow Federal and State laws and regulations.
Branch managers of financial institutions oversee all operations of a branch office. Their duties might include hiring personnel, approving loans and lines of credit, attracting business by establishing good relationships in the community, and helping customers with concerns about their account. Financial managers employed in financial institutions need to stay current with the rapidly growing range of financial products and services.
On top of these general responsibilities, financial managers have unique duties in each organization and industry. Government financial managers, for instance, must be intimately familiar with the government appropriations and budgeting processes. Healthcare financial managers, on the other hand, need specialized understanding of healthcare financing issues. In nearly all cases, financial managers must know any special tax laws or regulations that concern their industry.
To reduce risks and maximize profits, firms rely more and more on the guidance of experienced and knowledgeable financial managers in mergers and consolidations, and in international expansion and related financing. Firms increasingly hire financial managers as temporary consultants to advise senior managers on these types of business operations. In fact, some small firms hire contracting companies to handle all of their accounting and financial needs.
Technological advances that continue to reduce the time it takes to create financial reports have forced the financial manager’s role to evolve, especially in business. These managers often work on teams and spend more time analyzing data. From these analyses, they create strategies for more efficient business procedures, which they in turn us to advise top management. Because of this increasing reliance on computers, financial managers need to keep up with the latest technological advances in order to maximize their firm’s efficiency.
Financial Management Career Overview And Description
