What does a financial manager do | how to become one

What does a financial manager do in an organization, enterprises or firm is what this article will educate you on and not only that, you’ll learn how to become a financial manager

What is a financial manager

The financial manager is one who manages finances of the firm. He may be an accountant, treasurer, investment analyst, the controller or even or even the manager of the business.

Ordinarily, a business firm performs three major activities.

They are finance, production and marketing. These activities are linked to each other, and requires good management for the desired result.

In financial management, therefore we are concerned with efficient and effective fund generation and utilization.

What does a financial manager do

what does a financial manager do

Financial management is the management planning and control of financial resources of a business to achieve the objectives of the business.

It involves vigorous analyses of investment of organisation funds, its assets and the best mix of financing and dividend in relation to overall market valuation of the firm.

The financial manager is therefore anyone responsible for a significant corporate investment and the financial decision of the firm.

What does a financial manager do?

The financial management is one of the most dynamic membersof the top management team.

First of all, we should note that the financial manager is one member of an overall management team.

His/her activity is not an individual one but is a contribution to the total management effort and must, therefore, be coordinated properly with other contributions.

So if you want to know what does a financial manager do, they are as follows.

1. Growth of a firm

This is the major function of the financial management, is to help in the growth of the firm or organisation .

The maximization of profit does not necessarily require a firm of large size. Corporate power is often a function of size and this becomes a management objective.

2. Risk reduction

Many potentially very profitable enterprises also carry a high risk of expensive failure prospecting for oil for example a very profitable if a less risky strike is made but ruinous if the exploration proves abortive.

It may therefore, be a management objective of the financial manager to ensure survival by avoidance of risk, profit becoming a secondary objective.

3. Setting up objective plan

The financial management must set up an objective plan depicting how the firm should be run and controlled, and how he/she can achieve it.

It must control the resources used and the situation in which they operate so as to implement its plan.

In designing the techniques of financial management, certain objectives are frequently assumed but it must not be forgotten that a technique cannot determine an objective and if the objective changes then different techniques may become appropriate.

4. Fund Acquisition

The anticipation of fund as well as it’s subsequent acquisition fall under the domain of the financial manager. The financial management acting as the treasurer, accountant or investment analyst can acquire the needed funds.

Acquisition of funds involves keeping in touch with providers of funds, making timely requests with convincing facts and figures.

5. Fund allocation

What does a financial manager do? You can say that they help in fund allocation in an organization or a firm.

After acquisition, the financial management must bend down to allocate the funds so that resources will be used in their most efficient capacity.

Allocating funds in a business means investing them in the best balance sheet. Assets are balanced by weighing their profitability against their liquidity.

Profitability means earning power, while liquidity means nearness to money.

The financial management must steer a prudent course between over financing the business and under financing it.

Squeezing funds into the last naira may boost profitability, but doing so runs the risk that the company will lack resources to meet unexpected emergencies or opportunities.

Other thing that the financial management do is to prepare the firm financial statements, business activity reports, and forecasts.

It is the duty of the financial management to supervise employees in the organisation who do financial reporting and budgeting in the organisation.

As some of them can be marketers, they help to analyze market trends in order to maximize profits and find expansion opportunities for the organization or firm.

The financial manager can be a credit manager which oversee their firm’s business daily credit business. They help set credit-rating criteria, and thus determine credit ceilings, and monitor the collections of past-due accounts.

How to become a financial manager

how to become a financial manager

Wishing to become a financial manager in a firm or an organization you need to first ask yourself if you possess all that is required to become one.

To become a financial manager might require that you have these qualifications;

A bachelor’s degree in banking and finance, accounting, economics, or business administration or any other course that relates to finance like marketing, office management etc.

But i seemed to notice that many big companies or firms tends to require that their financial manager have have a masters degree or even a doctorate degree.

This is now the common trend in the careers sector, and if you’re planning to be a financial manager for a top organisation, then you should try and get at least a masters degree in order to make things easier for you.

Then another thing that matters is your work experience. I know some top companies that requires nothing less than seven years or even twelve years work experience for one to be a financial manager in their business.

The work experience is something that i don’t really buy, especially those requesting for twelve years work experience. Well there are some that tends to ask for just five years work experience.

So you should know that before you can become a financial manager, you must have a work experience or nothing less than five years. It is compulsory irrespective of your qualification.

Kindly note that work experience must be a work related to finance.

Apart from having the necessary and needed qualifications, next is your skills and qualities.

Do you have the skills and qualities of becoming a financial manager? The qualities and skills are as follows;

1. Communication Skills. The is the number one skill required from you to be a financial manager in an organization or enterprise.

You must know how to communicate freely cause it is through communication that you can transact and give directives in a firm.

2. Analytical Skill: When i say analytical skill, i meant to say that a financial manager must have the skill to collect, organize, visualize, and assimilate data in hie or her organization.

It is one of the compulsory skills required to become one in a firm today.

3. Leadership Skill: The most sought after finance professionals drive themselves and others forward through leadership and by cutting an inspirational figure

In order to make your flair for leadership known, you can include experiences and positions of importance headed by you in the past in your resume.

4. Problem solver: Definitely issues and problems will arise in a company, there’s no company or firm that will say that they’ve been running for years without any bit of hitches.

It is the duty of the financial manager to see that financial problems or issues in the organisation to be resolved swiftly without delay.

how to become a financial manager? You must have and possess all that i’ve listed above, both the qualifications and the skills needed from you to become one today.

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