Keeping Things Stable: The Value of a Financial Manager | IMA (2024)

Public companies rely on financial managers to keep things stable from a financial perspective. At the end of the day, public companies want to make money for their shareholders. So, it’s up to financial managers to help protect the organization’s financial health in both the short and long term.

Concerned with Money

Like their name implies, financial managers deal with money. They determine a company’s financial needs, timing, and how to secure funding to achieve its goals. That means they get to spend money through investments as well as raise money through financing.

Being a financial manager means managing and keeping tabs on a lot of very complex tasks. Sure, there’s a lot of number crunching and data tabulation. But there’s also plenty of financial information to analyze and report to senior managers, along with recommendations.

When a company needs to cut costs, financial managers help make the decisions on where those cost cuts will be most effective. They also actively participate in financial planning to determine the investments needed for short- and long-term goals. The decisions financial managers make every day can have long-term consequences, both positive and negative, for an organization.

Secure a Bachelor’s Degree in Accounting

To become a financial manager, at minimum, you need a bachelor’s degree in accounting. Employers also highly value a master's degree, as it demonstrates advanced understanding of accounting and finance principles. Certifications and knowledge of tax law and financial regulations are also quite helpful for this role.

A Higher-Than-Average Salary

At more than $139,000 a year, a financial manager’s salary far exceeds the median salary of other occupations. This high salary demonstrates the importance of this role. And it shines a light on the high stakes for organizations in hiring a competent financial manager.

The future for this role in the U.S. looks extremely promising too. Employers expect job openings for financial managers to increase by 16% in the next 10 years. That's much higher than the average 3% for all occupations, as reported by the U.S. Bureau of Labor Statistics.

Who do they work with?

If you like collaborating with a diverse array of people in an organization, then this just may be the role for you. Financial managers work with everyone from senior leadership to entry-level analysts and accountants. They also often manage a team of people who conduct financial reporting and budgeting.

What is their career path?

Depending on their interests, financial managers have a lot of options in terms of career advancement. Spending roughly seven years in the role can help you advance to roles like manager, financial planning and analysis (FP&A) manager, or even senior finance manager. Other reachable roles include controller, director of accounting and finance, or manager, finance systems.

Financial managers work in insurance, banking, and financial services companies across various industries. Different industries will offer different variations of this role. For example, in the high-risk insurance industry, financial managers need to protect a company’s financial health and maintain profitability. To become a finance manager in insurance, you must have a bachelor’s degree in finance management, actuarial science, or banking.

ESG Reporting

With so many financial managers in the insurance, banking, and financial services industries, you can expect a heavy focus on environmental, social, and governance (ESG) goals within their organizations. Clients of insurance, banking, and financial services firms will likely look to these valued professionals for guidance on how to implement new rules from the Securities & Exchange Commission (SEC) and other regulatory bodies.

Developments in ESG provide an opportunity for financial managers to show their value. Good financial managers will keep up with ESG requirements, as they will directly impact both internal and external operations.

Digital Transformation

Leading digital transformation within their group and across the entire company will carve out new value for financial managers.

Real-time analysis of the financial cycle, something that is now possible, will affect organizational operating models. Financial managers need to weigh in on decisions affecting the entire organization.

Their input on things like new service-delivery models, or working with AI and algorithms, is invaluable. A financial manager may need to decide if sending employees abroad is worthwhile. They may also need to assess the risks of collecting customer information due to privacy concerns.

Automation will make calculations much quicker and more efficient. But that just means financial managers will play a larger role in companywide decisions. As routine functions like forecasting are performed by algorithms, financial managers will need to understand the workings behind this technology. They can validate algorithms with data scientists, who are increasingly doing so without human involvement.

Financial Managers and Generative AI

Generative AI like ChatGPT, Google Bard, and Microsoft Bing will be game changers for financial managers. Humans used to create things like text, images, audio, code, voice, and video. Now, algorithms can generate them all. When it comes to financial planning and analysis, AI can do all sorts of things like predict income, prepare balance sheets, and even forecast cash flows.

As these applications improve, strategic finance professionals will use them more frequently. They will use these applications to review deals, conduct research, manage money, and analyze risks and scenarios. Ultimately, financial managers will need to suggest how to use AI to create big changes for their organizations.