What does a Financial Manager do?

The Financial Manager has an important role in any company and the industry is no different. In this article we will see what a financial manager does and how important it is for a company. Despite carrying the title of financing, this professional is responsible for much more than simply taking care of the company’s cash flow. To complement the text, we will also talk about the ideal professional profile to occupy the financial position of financial manager and also about what does a financial manager do. Come on:

What does a Financial Manager do?

To begin with, the financial manager is responsible for everything that involves money in a company. However, this is definitely not your only direct investment activities. The position of cash manager requires actions that go beyond the financial modeling movement of the company, such as making financial decisions to increase the value of the company’s equity and in relation to the company’s overall strategy (and to follow the financial goals and results of these financial decisions). To summarize, the cash manager needs to apply resources for the company’s job growth management and analyze the data, following flows, to then present to the board. It is important to note that the financial decisions making made by the cash manager must also be aligned with the company’s general financial goals management and objectives.

Tasks performed by a Financial Manager for management

Now that we understand the main roles of a financial manager, let’s move on to the most practical and in-depth part of a financial manager’s tasks. That way we can understand its importance more clearly. Here are the main tasks of the financial manager:

Daily financing control

In this activity, the financial manager calculates all the company’s opportunity cost and raises new mutual fund. It is also in this stage that the cash flow is monitored, the inventory is controlled together with the production and the payment of taxes and labor charges. In addition, the financial manager must negotiate with suppliers and possible debt that the company may have.

External market analysis

In this task, the financial manager must evaluate the factory’s performance in relation to the competition. You need to understand what is happening in the market and how your plant can keep up with changes to remain competitive.

The general idea is to follow:

  • The current economy
  • Consumer behavior
  • Supplier behavior
  • The behavior of your competitors

Communication with financial institution by credit manager

Having a good relationship with investment banks is one of the tasks of the credit manager, so that your company can achieve better credit conditions and other benefits by credit manager strategies, such as less fees and bonuses.

financial planner and Planning

The financial manager must carry out several types of financial plan, among them, tax financial planner is one of the most important. It is at this time that the company determines what type of taxation the company will operate during the determined period. In addition, it is also necessary to plan the cash flow, budget,job growth, action financial plan and also assist as a assistant finance manager in the pricing of the company’s products.

Internal communication

It is the responsibility of the finance manager to present the company’s results and financial modeling financial plan to managers and shareholders. He must provide the resources to facilitate the decision making of managers and thus ensure that the company takes the appropriate course at the moment.

Professional profile of a good Finance Manager

Now that we have passed the list of direct investment activities of a finance manager, it is time to talk about the ideal profile of this professional. This is important, as this professional has a great responsibility in the business finance and it takes commitment to achieve the desired results. Come on:

Ethics and transparency

These two characteristics are the main ones in a financial manager. This is because it is a highly trustworthy financial position, dealing with money and tax issues. If the person is unethical or hides information, your company can end many problems.

Leadership

To be a manager in any sector you need to have a well-resolved leadership and in the financing sector it is no different. The financial manager needs to know how to coordinate the team so that everyone can achieve the best results according to the financial goals defined by the company. Pay attention not to make these leadership mistakes most common in companies.

Team work

Following the line of leadership, a good financial manager needs to relate to several people to carry out his work effectively. Since collecting the data, analyzing by financial analyst and presenting it, it will be necessary to work as a team to achieve the desired results.

Discipline

The financial manager needs to be a disciplined person to carry out the day-to-day routine tasks but also follow the annual financial planner and achieve the goals set by the company.

Analytical skills profile

It is essential that you develop an analytical skills by financial analyst profile to understand the situation of the company and the market. When analyzing data with the right eye, your ability to make investment decision will be much more secure and assertive.

Frequent update

The good financial manager must always be up to date and must know his market and the economic market very well. This is because the more the financial analyst manager knows, the better his investment decision making and data analysis will be.

Good relationship

The financial manager must promote strategic alignment throughout the company. For that, it is necessary to maintain a good relationship with different areas and people of the company.

Proactivity

To close, proactivity is key to solving problems quickly and effectively. In the financial position of manager, the person must act on his own when he sees an opportunity for improvement and thus take the company to a new level.

Boost your financial management

Now that you know what a financial manager is, what he does and what his ideal profile is, it’s time to take the next step and learn about a tool to help this professional’s work. I invite you to watch a demonstration of Nomus ERP Industrial software and see in practice how this ERP developed for small industries can help your company and your financial sector. See also What is the importance of financial management and how to apply it to the business?

Conclusion

As it was possible to observe, the function of the Financial Manager is the heart of the company , counting on tasks of extreme importance for the success of the business finance. In addition, we saw some fundamental characteristics of this profession such as ethics, pro activity and discipline.

We hope that the doubt about what makes a Financial Manager has been solved. If you want to know more stay tuned to our next articles or talk to one of our consultants.

 

What is the difference between an accounting and a financial senior management?

Both activities work with the information generated from the day-to-day financial transactions of the company. However, the main difference between accounting and financial management are:

Financial senior management.

Financial management focuses on the company’s money, what financial availability and how it will evolve in the future. Analyzes all of an organization’s administrative procedures, investments and financial transactions.

The results of financial management continue the accountant’s work. An example is the need for a loan through loan officer. From all the data, coming from accounting and financial management software, the manager assesses and will need to ask the bank for financing. Good financial management can point out the best investments for the money that is stuck in the company’s account.

Accounting

Accounting is an indispensable tool within Financial Management. Its role is an indispensable activity for the proper execution of treasury management.

The accountants takes care of the company’s relationship with the Tax Authority, making sure that all obligations are being fulfilled within the legal term.

It is use to obtain the necessary information to evaluate the entire performance of a company.

A good accounting advisory service can be useful when advising future entrepreneurs so that they can invest correctly and thus reduce all financial risk.

So, in short when the entrepreneur neglects accounting or financial management, he is putting the company’s future at financial risk.

What is the role of financial management in a firm?

The financial management is therefore directly related to the way a company deals with its finances and the results and benefits it achieves through direct investment activities handling.

The financial management should occupy a prominent status and priority in companies. Just as companies can move more intensively towards success with good financial management, the absence and poor execution of this activity can represent the decay of a business.

Every company needs a strategy to grow and develop; but how would it be possible to develop a consistent and realistic strategy without reliable data on the company’s financial situation? So,It is very important to apply finances in our companies, so that they really interfere in the composition of profits, analyzing their short and long term obligations, their investments, their costs and expenses, turning this into a daily routine, observing through their financial statements how and when to invest, as well as analyzing what the economy says, showing the market, its variations and what it demands for future investments.

How do the three key activities of the financial manager relate?

The finance manager must have a solid academic background, a lot of knowledge and updated information about the context in which it is inserted. “But all of this is not enough. He must be prepared to face challenges all the time, mainly adaptive challenges arising from exogenous market factors. The three key activities of the financial manager are as follows:

Accounting

Prepare social and consolidated accounts, ensuring their compliance and reliability. the financial business administration are responsible for accounting, consolidation, management control, one or more shared service centers ( where the general and auxiliary accounts of the various entities of the group are kept).

Financial information and banking relationships   

The manager have to manage treasury operations and financing, relationship with third parties: bankers, statutory auditors, etc. Supervise management control: planning, budget, financial reports, implement financial reporting and management information systems, Prepare studies of industrial and financial investments.

Management and decision making

Supervise, the internal control team and participate in the process of implementing the new rules and regulations. He is responsible for defining the company’s strategy coordinating financial communications and relations with shareholders and investors, and supervising the internal audit issues legal and taxation, human resource management and general services.

What are the main personal skills in Financial Management?

A financial manager needs to leave behind the image of a strict, feared boss who oppresses his employees and other colleagues. This profile has already lost ground and, currently, the main people competencies in management involve more than just skills and techniques. Here the main essential of personal skills for managers:

  • be a good observer, always attentive to the environment and analyzing everything that happens around;
  • empathize and recognize that each person has his / her limits, qualities and defects and how to work on these characteristics;
  • always in search of knowledge;
  • be a good listener, communicate and be transparent;
  • be organized and know how to distribute tasks so that no one is overwhelmed;
  • be confident, with emotional intelligence and always have initiative;
  • have a holistic view of the company, seeking to get to know it in its entirety and understanding that the financial sector is integrated with all other areas of the company.

To develop the characteristics mentioned, it is important to have a lot of disposition and preparation. A financial manager who feels stagnant must first want to change and then be resilient and work hard to become an up-to-date leader.

What are some disadvantages of being a financial manager?

Occupying a leadership position is the desire of many, as it means professional advancement, recognition of your skills and the possibility of greater financial gains. In some cases, the leader also gains greater status and influence in the company. Despite these benefits, there are some cons that come with the role, such as greater responsibilities, tighter routines and the need to deal with conflicts and pressure situations. Here are some disadvantages and challenges of a leadership position.

Time Commitment

It can take years to become a financial manager takes a lot of years because some employer will hire applicants with a bachelor’s degree in finance.

The accounting or economics and many other financial institutions prefer candidates with an mba. And most of time also wasted in other positions, like a loan officer, accountant or financial analyst. So, it takes a lot of time to upgrade their position from loan officer to financial manager.

How can financial managers make wise planning, investment, and financing decisions?

The financial manager plans the company’s finances. It organizes, captures and invests the resources in the best way, aiming to obtain more profits. It is part of its functions to analyze financial statement, evaluate the maintenance of inventories. 

The primary objective is to increase the value of the company’s net worth and, for this, the professional must study the financial situation very well and carry out a strategic financial analysis that enables smarter decision-making. So, he manages to further optimize financial earnings at the end of the month. The financial manager must take a rational approach, not forgetting to humanize the financial data taking into account that an organization is made by people. With the increasing strategic importance of the financial area, the manager does not only act in this sector, but also helps in making decisions in the business as a whole.

What’s the difference between a finance manager, a finance controller, an accounting manager, and a commercial finance manager?

Finance manager 

The Finance Manager is in charge of the flow of money and assets going in and out of a company. . It manages cash flow, tax management, control of accounts payable and receivable, control of financial investments, among other financial transactions, in order to improve the company’s results. According to money inflow and outflow they review and prepare earnings and employer performance reports. In this sense, these financial professionals must be familiar with the laws and regulations applicable to the field of finance for financial reports, review and prepare earnings and employer performance report

The financial manager also creates the famous demo financial reports. Therefore, it needs, for the creation and understanding of such, to be attentive to the billing data, expenses and costs

Finance controller

The financial controller, in the business field, is the person responsible for the financial control and management of the company. Its main mission is to establish a control plan for the different projects of the company, to find out what the line of action will be based on how each of them advances.

This is of great help to the company, since it allows to know if the project is going according to forecasts, if these are worse than the actual results or are better. And in this way, with the financial analysis of this data, the financial controller can develop improvement plans, which will be applied to the company’s future projects.

Accounting manager

Accounting manager manages the company’s accounting activities, according to legal principles, policies and guidelines, appropriate to the business strategy. Analyzes accounting information and prepares the preparation of balance sheet and balance sheet, to monitor the economic and financial situation of the company and make budget forecasts through balance sheet.

Commercial finance manager

A commercial finance manager plays a critical role in all aspects of the financial and commercial planning of an organization. However, a good commercial and financial director goes further, and tends to encourage renewed business growth, thus ensuring an appropriate balance between financial risk and rewards.

What are the requirements to become a financial manager?

There is no unique and exclusive training to be a financial director, but there are ways that will allow you to achieve the success in the field of finance to become a finance manager. Schematically we can summarize the route in these three points:

University degree or higher degree in some branch of knowledge related to accounting and finance. We leave you some ideas:

Business Administration mba and Management Economy Finance, Banking and Insurance manager International finance business

Master or Masters specialized in Financial Controller and / or financial senior Management.

Knowledge and skills in languages ​​and new technologies is required for becoming senior managers in financial professionals

In any case, do not forget that once you have completed your training, you must develop your career as CFO within a company through the different are of business administration, accounting and treasury.

What are the qualities of financial director?

Financial director personal qualities, aptitudes and capacities could be summarized as follows:

Effective leadership with a long-term vision. For this you will need to work on the motivation of your team through marked objectives and flexibility.

Communication skills, both when addressing their superiors, who are usually the CEO and the members of the Board of Directors, as well as their peers and subordinates.

Negotiation skills that you will have to implement in the various interactions that you have in your day to day.

Extensive accounting, financial and business knowledge, while being continuously in the learning process.

Show integrity and sound ethical values when dealing with sensitive information that you work with on a daily basis.

So this is the qualities of financial director, so you have a more complete vision of this position.

What is the salary of a financial director?

The world of finance has always caught everyone attention for job growth and one of goals in life of many people is to have a position of responsibility in this area, do not doubt that becoming CFO is the best decision you can make. The average Financial Director salary in Mexico is $ 360,000 annually or $ 184.62 per hour. Basic hierarchy positions receive $ 24,904 per year, while more experienced professionals can earn up to $ 612,000 per year. So this is an idea about finance senior manager’s salary and if in the end you decide for this profession, must look on responsibilities and qualification for becoming finance manager. As his work is related to the financing of the company and to develop a strategy so that the business continues to rise.

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