How to Become a Financial Manager?

Author: University of North Dakota
May 27, 2024

Effective financial management is undeniably a fundamental pillar of success in any business endeavor.

Regardless of whether you're embarking on the exciting journey of launching a startup or steering the ship of an established enterprise, possessing a comprehensive understanding of financial management is non-negotiable. 

Let's look into the details of how to become a financial manager. In doing so, we'll explore the necessary financial manager education requirements and skill sets as well as examine the salary expectations and other aspects of this esteemed profession.

What is a Financial Manager?

Financial managers are key decision-makers responsible for overseeing financial activities, ensuring fiscal health and optimizing resource allocation within organizations. They play a crucial role in steering the financial course of organizations toward success. 

Financial managers are primarily focused on three crucial decisions for business operations: capital budgeting to identify and evaluate investment opportunities, financing decisions to determine how to raise capital effectively and working capital management to ensure short-term obligations are met while maintaining liquidity and efficient cash flows.

What Does a Financial Manager Do?

Financial managers navigate an array of tasks and responsibilities integral to the organization's financial well-being. Their role encompasses:

• Developing comprehensive financial plans and forecasts to guide strategic decision-making and resource allocation
• Creating budgets, monitoring expenses and implementing cost-control measures to optimize financial performance
• Identifying potential financial risks
• Implementing strategies to mitigate risks
• Ensuring accurate and timely financial reporting
• Providing financial insights to stakeholders
• Conducting thorough analysis and evaluation of investment opportunities
• Managing cash flows, optimizing liquidity and investing surplus funds to generate additional income
• Ensuring adherence to financial regulations and standards

How to Become a Financial Manager

In order to pursue a career as a financial manager and handle the duties that come with it, you need to obtain the required academic qualifications, practical experience and professional certifications. These are all essential in preparing individuals for a successful career in financial management.

Earn a Bachelor's Degree

A bachelor's degree is often a prerequisite for entry into financial management positions. Therefore, obtaining a bachelor's degree in Finance, Accounting, Economics, Business or a related discipline is imperative for individuals aspiring to assume roles as financial managers. These academic pursuits provide students with indispensable knowledge and skills essential for navigating the intricacies of financial management. 

In particular, a Managerial Finance & Accounting degree program is an excellent choice. This program offers a well-designed curriculum that covers important topics such as financial analysis, investment strategies, budgeting and core accounting principles. Graduates of this program are equipped with a comprehensive understanding of financial management, which prepares them to excel in financial management roles.

Get an Internship

Securing internships in financial firms or corporate finance departments is another crucial step for individuals who aspire to become financial managers. These internships offer practical experience that complements academic learning, which is invaluable. 

By immersing themselves in the day-to-day operations of financial institutions, interns gain a firsthand understanding of industry dynamics, market trends and regulatory frameworks. This exposure allows them to apply theoretical concepts to real-world scenarios, enhancing their problem-solving and critical-thinking skills. 

Additionally, internships provide opportunities to work alongside experienced professionals, receiving mentorship and insights that can shape their career trajectory. They also offer a platform to network with industry professionals and build relationships that may lead to future employment opportunities. 

Overall, internships serve as a bridge between academic education and professional practice. They equip aspiring financial managers with the practical experience and skills necessary to thrive in the field.

Consider Getting a Master's Degree

Next, pursuing a master's degree in finance, business administration or a related field can significantly advance the careers of aspiring financial managers. Programs like the Master of Business Administration (MBA) or Master of Accounting (M.Acc.) offer an in-depth exploration of advanced financial concepts and managerial principles, providing students with a broader and deeper understanding of financial management. 

These advanced degrees examine specialized areas such as financial analysis, strategic planning, risk management and corporate finance, equipping graduates with highly sought-after skills and expertise in the competitive finance industry. 

Additionally, earning a master's degree can enhance job prospects and open doors to higher-level positions within organizations. Employers often value the advanced knowledge and expertise gained through graduate-level education, considering master's degree holders as more qualified and competitive candidates for managerial and executive roles. 

Last but not least, pursuing a master's degree demonstrates a commitment to continuous learning and professional development, which can boost credibility and confidence in the eyes of employers and peers alike.

Earn Your License

Professional certifications are crucial for financial managers who want to stand out in finance. Such certifications demonstrate expertise and competence, validate proficiency in specific areas of financial management and indicate a commitment to high professional standards to employers and clients.

The Certified Financial Planner (CFP) certification, for example, is widely respected in the financial planning industry. It shows mastery in retirement planning, investment management tax planning, estate planning and insurance. Financial managers who obtain the CFP certification can provide comprehensive financial advice and guidance tailored to clients' needs and goals. 

Similarly, the Chartered Financial Analyst (CFA) certification is globally recognized as the gold standard in investment analysis and portfolio management. Financial managers who earn this certification demonstrate a deep understanding of financial markets, investment instruments and portfolio management techniques. They possess the skills to conduct rigorous investment analysis, assess risk and construct diversified portfolios to maximize returns for clients. The CFA certification is particularly valuable for financial managers in asset management firms, hedge funds, investment banks and institutional investment departments.

Work Environment

Financial managers typically work in office settings, often within organizations' finance or accounting departments. They collaborate closely with other departments, including, but not limited to, sales, marketing, operations and human resources, to gather necessary data and insights for financial analysis and decision-making. Additionally, they interact extensively with senior management, providing strategic financial guidance and presenting reports on the organization's financial performance.

The U.S. Bureau of Labor Statistics (BLS) reports that financial managers hold approximately 792,600 jobs and their largest employers are in the following sectors:

• Finance and insurance (30%)
• Professional, scientific and technical services (14%)
• Management of companies and enterprises (10%)
• Government (6%)
• Manufacturing (6%)

Most financial managers work full time and some may work more than 40 hours per week to meet organizational demands and ensure timely and accurate financial reporting. However, financial managers may experience longer hours and high-pressure situations in certain industries or during financial reporting periods.

Skills Required for a Financial Manager

Financial managers need a range of traits and abilities to succeed, including:

• The ability to analyze financial data and interpret trends and patterns
• Capacity for long-term financial planning aligned with organizational objectives
• Effective verbal and written communication skills
• The ability to motivate and inspire teams
• Aptitude for identifying financial challenges, developing innovative solutions and implementing effective strategies
• Commitment to ensuring accuracy in financial reports
• Upholding ethical standards and integrity in financial practices
• Flexibility to adjust to changes in the financial landscape
• Skill in assessing and mitigating financial risks

Job Outlook and Salary

The job outlook for financial managers is exceptionally promising, with employment anticipated to grow by 16% from 2022 to 2032. Over the decade, about 69,600 openings for financial managers are projected each year, on average. 

The demand for services provided by financial managers, including planning, directing and coordinating investments, is expected to remain strong as the economy expands. Moreover, certain specialties within financial management, particularly cash management and risk management, are anticipated to be in high demand. 

In terms of salary ranges, financial managers typically earn a median annual wage of $139,790, according to the BLS. The lowest 10% earn less than $79,050 annually, while the highest 10% earn more than $239,200. However, various factors can influence compensation, including years of experience, level of education, industry sector and geographic location.

Conclusion 

Becoming a financial manager entails prioritizing education, gaining valuable experience and honing relevant skills. Whether pursuing a bachelor's degree in finance or accounting, seeking internships to gain practical insights or continuously developing analytical and communication abilities, each step taken brings aspiring financial managers closer to their goals. 

So, embrace opportunities for learning and growth, seize every chance to gain hands-on experience and join us at the University of North Dakota (UND) to begin carving your path to financial management success today.

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