Maintaining financial health may be challenging for a growing business. Scaling a business requires a specific set of financial management skills. Learning to manage company finances is crucial as it helps with company sustainability and makes growth easier to achieve.
While it may be stressful, managing finances should be looked at as a learning opportunity and one of the best ways to improve financial health. This guide will help you hone your finance manager skills to grow your company.
What Is a Finance Manager and What Are Their Functions?
Owners hire finance managers to address a growing business’s challenges. Finance managers are responsible for maintaining an organization’s financial health and for keeping a business on track to its financial goals. They are more than an accountant in that they look at the larger company picture.
The sections below provide a clearer idea of what a finance manager is.
What Is a Finance Manager?
Finance managers are accountants who are responsible for the finances of an organization or company as a whole. They may encourage corporate officers and upper management to determine where and how assets are acquired, managed, and located.
A finance manager creates financial statements and reports with their range of skills. They work with C-suite executives to create realistic financial goals and implement plans on how to meet these goals.
These professionals often have a formal education, such as a bachelor’s degree or master’s degree. Some are also certified public accountants or chartered financial analysts with advanced knowledge of tax laws and other financial practices.
Common Functions of a Finance Manager
The following are some of the most common functions of a finance manager. Keep them in mind to get an idea of the type of financial problems examples financial managers must solve, from audits to risk management and financial business administration.
Evaluate Cash Flow Scenarios
A financial manager will study your organization’s financial data and evaluate your cash flow. Cash flow refers to the money transferred in and out of a company. Financial managers often conduct a cash flow analysis to determine how much cash a business generates or uses during a specific period and where the money is coming from and going. This analysis is useful in understanding a company’s financial health.
Your financial manager also analyzes financial data and current interest rates, creating strategies to move money to better areas. They look at your debts and investments and see how these line up with your goals. They can also help you create a plan to meet these financial goals while minimizing risk through financial modeling.
Forecast Expenses and Earnings
Your manager can create forecasts on your organization’s expenses and earnings to help predict its financial standing. They will use these predictions to create a roadmap of what needs to be done to optimize spending and achieve revenue growth.
Apply and Understand Contracts
Your financial manager studies contracts your organization is involved in and ensures that these don’t exceed projected expenses. With the finance team, the manager tracks payments from clients and maintains accurate records for easier auditing. This way, financial managers can minimize financial risks to organizations.
Finance Manager Qualifications and Skills
Modern financial managers need to monitor more than just your company’s cash flow. They are expected to play a vital role in the company’s financial development. This is why financial managers need more than just a degree in finance or accounting.
Here are some of the additional finance manager qualifications and skills that the role requires.
1. Leadership
At the higher levels, finance managers need to have a team of finance officers and accountants working with them. This means as your career progresses, you need to continue your education and hone your leadership skills. More companies are working toward a more streamlined organizational structure, meaning more financial managers will need the ability to collaborate with others and lead them. Many will also need to learn to manage their teams virtually.
2. Problem-Solving
Whether you are calculating investments or analyzing a budget, you need to be adept at finding a solution and taking action. The most important finance manager tips involve having a deep understanding of a business’s financial health and being able to create a strategy for meeting financial goals despite risks and liabilities.
3. Budgeting and Forecasting
An efficient finance manager can easily analyze your organization’s financial data and create a workable budget. They will rework the budget regularly to represent your financial goals and where you are at in achieving them.
In addition, your financial advisor can study your organization’s past expenditures, revenue, and cash flow and create strong forecasts that provide insights into your company’s financial health six months, a year, or several years from now. These forecasts can also inform executive business decisions.
4. Project Management
Your finance manager must be able to manage multiple projects simultaneously. Finance manager skills include delegating tasks when needed and making sure they are done well. Your finance manager must be able to break down your organization’s goals into smaller tasks that the finance team can execute.
5. Tech Knowledge
Technology has changed almost every industry, especially the financial services industry. These tech advances have made it easier for finance managers and their clients to access their balance sheets, financial statements, and income statements.
There is also new accounting software available regularly to help solve financial problems examples. Xero, Oracle, and Hyperion are all examples of programs that can make a finance manager’s job easier. An efficient financial manager stays current on the newest tech and how it will help them and their company improve their finances.
6. Analysis
A reputable financial manager needs to practice logical thinking and have the ability to analyze data effectively. They are able to look at all the options to present an understandable and actionable analysis. They use analytical skills when analyzing or writing contracts, forecasting losses and profits, and creating budgets.
7. Attention to Detail
A good finance manager must be accurate in every report he or she creates. They must know to use data accurately to create useful analyses for the organization. They must pay close attention to where a company spends money, makes a profit, and all areas of cash flow. When working on contracts, finance managers must also have an understanding of international and domestic regulations and laws.
8. Mathematical Proficiency
There is little doubt that a good financial manager must be proficient in math. Their roles require them to work with data and numbers and understand complicated transactions. They must be able to use advanced algebraic formulas and use them to their advantage in accounting.
A great finance manager also understands international finance and is able to work through foreign financial documents with ease. This can come in handy if you frequently work with international clients.
How to Be a Better Finance Manager: 5 Tips
The following tips can be useful for business managers looking to improve their skills in reading financial reports, analyzing financial data, and managing money. Keep these in mind if you want to learn how to be a better finance manager, whether you are completely new to financial analysis or are already an experienced financial analyst.
1. Set Realistic Financial Goals
Your guidepost for financial operations is the financial goals you set. To develop your financial management skills, set realistic goals with short timeframes so you can achieve them and grow. You may decide to reduce debt, increase revenue, decrease expenses, invest, get more clients, or any number of these goals.
Depending on the goals you set, your allocation of funds may change. If you want to decrease debt, you may pay more on loans. If you want new clients, you may spend more on marketing. Finance manager skills require knowing how to adapt the budget appropriately for each goal.
2. Improve Leadership and Communication Skills
Studies have shown the best managers work hard at developing skills to motivate their team and affect change. When you have good communication and leadership skills, you can empower your employees and managers to get involved in helping the organization achieve its financial goals. Using these interpersonal skills will help you keep your team’s goals aligned with the bigger picture of improved financial health for your company.
3. Familiarize Yourself with Key Financial Concepts
One of the best ways to become a better finance manager is to learn more about financial concepts and how these apply to your organization. Start reading all the books you can get your hands on, take a course, and network with other professionals so you can learn from their best practices. Take advantage of resources in financial management such as seminars, learning tools, webinars, and others. Be voracious in your pursuit of improving your knowledge of the financial industry.
4. Start Managing Your Personal Finances
If you want to be an efficient financial manager, then start with your personal finances. Learning how to set financial goals for yourself, create and manage a budget, handle debts, oversee investments, and maintain balance sheets will set you up to be an excellent financial advisor. This small-scale financial planning will give you practice.
5. Get Involved
In addition to continuing your financial learning, you need to get involved and improve your skills so you can handle day-to-day decision-making. This may mean joining organizations for professional financial planners. You can even join groups that discuss financial wellness and set goals together to work on. It may even be taking a community class on creating a budget.
It is important to remember you won’t see growth overnight, but small changes over time will improve your financial management skills.
Struggling with Financial Management?
We get it: When it comes to managing finances for a business, there are a lot of moving parts. Some common challenges business owners face during the transition include not using a budget, inconsistent cash flow, taking on too much debt, and mixing personal and business finances. Some ways to deal with this are hiring a financial manager, developing financial management skills, and getting the right tools to manage their finances.
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