What Are the Essential Skills of a Finance Manager?
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Finance managers oversee the financial operations of a company. They create detailed financial reports and statements using a wide array of skills. Learning the essential skills of financial managers can help you perform your role effectively and deliver positive results for your employer. In this article, we discuss the critical skills that can help you succeed in a finance manager position.
20 important skills for a finance manager to have
There are a variety of finance manager skills you can develop to help you perform your duties effectively. Working in a finance manager role requires several technical and soft skills, as you may oversee all aspects of a company's financial transactions, including budget analysis, calculation of return on investment (ROI) and purchasing or staffing decisions. If you're currently working as a finance manager or aspiring to become one, it's important to develop the following skills to improve your chances of success in the position:
1. Financial reporting skills
As a finance manager, it's important to have skills in financial reporting. This skill can help you track, analyse and report a company's income effectively. The information from financial reports allows companies to determine cash flow, resource efficiency and business performance and how these variables affect their financial wellbeing. Having this skill can help you provide data-backed advice and valuable recommendations that can improve the company's bottom line.
2. Financial analysis skills
Financial analysis is another important skill that can help you deliver positive outcomes for your employer. This skill can help you assess the feasibility, stability and profitability of a business or project using data from financial statements, budgets and cash flow records. Having this skill and being able to leverage it to boost business performance can make you an appealing candidate for employers and improve your efficiency in your current position.
3. Financial forecasting skills
Financial forecasting is the process in which an organisation determines the expectations of future results. This skill allows you to help your employer make data-backed decisions that can lead to profits and higher market performance. Being proficient in forecasting can help you move your employer closer to its goals and improve resource efficiency.
4. Budgeting skills
Budget preparation and implementation are important functions of a finance manager. Being able to quantify resources and tie them to specific goals and objectives for a particular period is a vital success factor for this role. The ability to budget effectively considering the company's current and future revenue flows and performance can help improve resource allocation and efficiency, satisfy the demands of company stakeholders and enhance the organisation's productivity and financial health.
5. Spreadsheet skills
Proficiency in spreadsheet tools is a basic requirement for finance roles. As a finance manager, it's important to be proficient in spreadsheet software, as this can help you perform your duties effectively. Whether you're tracking financial statements, analysing data or even performing complex calculations such as variances, spreadsheets can offer myriad capabilities to improve your effectiveness.
6. Data analytics skills
Finance managers often collect and analyse financial data. This makes it important to be proficient in general data analysis tools. Having this skill can help you derive valuable insights from your employer's financial statements and make decisions based on credible, verifiable information.
7. Business intelligence analytics skills
Finance managers also perform business intelligence roles. Even if you don't have advanced knowledge of business intelligence analytics, it's important to have a basic understanding of its principles. Business intelligence analytics use powerful software to identify patterns and trends in data for decision-making purposes. Leveraging this technology can give your employer enhanced predictive abilities to maintain its competitive advantage over market competitors.
8. Information technology skills
Working as a finance manager requires being tech-savvy. Most of your duties typically involve working with computers and proprietary financial software. Besides the technical aspects of the job, managing people and meeting with company stakeholders also involves the use of technology.
9. Tax preparation skills
As a finance manager, your work may involve advising management over tax matters. You may also oversee the accounting or tax department, ensuring that their work complies with regulatory and legal procedures and guidelines. Being knowledgeable in tax matters can ensure that you provide only quality recommendations to management and also protect your employer from liabilities and penalties.
10. Leadership skills
As a finance manager, you may work with individuals or as part of a team and generally bring a strong foundation for leading finance teams. It's important to know how to enhance efficiency and productivity while maintaining confidence in your ability to move the company forward. It's also important to have the ability to direct others and delegate tasks. Good financial managers take charge of situations and form effective solutions to encourage trust in their leadership skills.
11. Communication skills
Working as a finance manager may involve a lot of writing, reading and speaking to a large audience. Your job may involve creating reports, reading financial statements, giving presentations and meeting with clients, teams and investors. Performing these functions effectively requires the ability to speak confidently, listen actively and write professionally.
12. Investigative skills
One way to help your employer maintain good financial health is through fraud prevention. It can be easy to identify and prevent misconduct if you have investigative skills. As a finance manager, it's important to improve your ability to investigate issues so you can help your employer prevent fraud, embezzlement and other financial malpractices.
13. Critical thinking skills
The ability to think critically is an essential attribute of successful finance managers. Critical thinking is the ability to objectively analyse information and draw a rational conclusion. Whether you're leading strategic planning sessions, forecasting revenue for the next two years or trying to prevent waste and fraud, critical thinking skills can help you solve financial problems that your employer is facing.
14. Attention to detail
Accounting roles, especially that of a finance manager, require exceptional attention to detail. Being detail-oriented is critical for identifying errors in financial statements. The skill is also important for effective budget preparation and implementation, forecasting and other vital functions of the finance manager.
15. Problem-solving skills
If you're working in a finance manager's position, it's important to have advanced problem-solving capabilities. Problem-solving skills can help you determine the source of an issue and find an effective solution. Successful finance managers are adept at diagnosing and analysing issues for effective resolution. Besides resolving issues, these professionals also know how to create and implement internal guidelines to improve efficiency and prevent issues.
16. Interpersonal skills
The role of a finance manager is people-facing, so it's important to have excellent interpersonal skills. Your work may involve supervising junior employees, collaborating with department heads and meeting with management. It may also involve advising other managers, pitching ideas to investors and working with customers, vendors and suppliers. These activities require a high level of people skills, such as communication, conflict resolution and emotional intelligence.
17. Organisation skills
Successful finance managers have strong organisation skills. As a finance manager, you may oversee budgets, train and supervise employees and advise management. You may also create a strategic plan for the company's finances and perform other high-level functions that are time-sensitive and critical to the success of the business. Performing these tasks effectively requires being organised.
18. Ability to work independently
Successful finance managers only require minimal supervision. This is because they understand what needs to be accomplished and how to meet the company's goals. Good finance managers are not only self-starters who can prioritise tasks, but their leadership skills enable them to motivate others to work independently as well.
19. Mathematical proficiency
As a finance manager, you may work with large sums of money and rely on advanced mathematical abilities to compile and analyse data. Thus, it's important to have an understanding of algebraic mathematics and creating formulas. It's also important to have an in-depth understanding of international finance and the ability to decipher a large variety of financial documents.
20. Proficiency in generally accepted accounting principles (GAAP)
The job of a finance manager may involve accounting, which is why it's important to have in-depth knowledge of GAAP. GAAP provides a universal standard for performing accounting functions, such as preparing financial statements and analyses. Having an in-depth understanding of GAAP can make it easy for you to collaborate with a wide range of accounting professionals within and outside your organisation. It can also make the implementation of financial guidelines more effective and enhance your ability to prevent financial misconduct.
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