The 6 Main Finance Manager Functions (Plus Skills)
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Finance managers serve many functions for their clients, which can require a varied, specific set of skills. These functions help clients effectively manage wealth and financial resources. Understanding the functions of a finance manager and the skills that support those functions can help you better understand the requirements of the position. In this article, we explore six main finance manager functions and some key skills for finance managers.
6 main finance manager functions
Finance manager functions vary according to the place of work, but typical tasks include analysing budgets, daily reporting and budgetary planning. Here are six main functions of a finance manager:
1. Forecasts financial needs and plans financial strategies
A finance manager is a crucial part of a growing business because they help forecast the company's financial needs and plan financial strategies. This includes creating cost estimates, performing research on the cost of resources or fixed assets and predicting the company's future financial needs. The manager also plans how to acquire the funds for the company, exploring multiple avenues which may include business or private loans, crowdfunding or capital investors. The finance manager may also help distribute and manage these funds for the business to ensure compliance with the company's financial plan.
2. Helps clients make tough financial decisions
Finance managers help clients make tough financial decisions for the company or their personal assets. Sometimes, financial decisions require sacrifice or loss of assets, and the process can be difficult for clients without help. The finance manager can analyse the pros and cons of each decision and determine how it might impact the business, providing an expert-level analysis of the client's choices. This can help clients feel more confident in their decisions and can help them avoid or minimise potential losses. Financial managers can assume responsibility for financial successes and obstacles that may occur if clients follow their advice.
3. Maintains liquidity for client assets
Finance managers help businesses maintain liquidity or assets that are easily transferrable to other assets. Perhaps a company's most liquid asset is any cash it has, which the finance manager handles. The manager ensures that the company has enough liquidity for daily operations and determines how to best secure future liquidity for the business. They might oversee capital investment funds and liquidation of company assets to generate cash and create a company budget for its liquidity needs.
4. Invests funds
Finance managers may also invest on a company's behalf in the stock market. They can help identify unique and potentially profitable investment opportunities for the company and advise company leaders on how to best maximise those profits. For example, a finance manager might identify the opportunity to invest in a cryptocurrency that can create a potential 50% return for the business. The manager collects data on the investment, prepares a report and pitches the idea to the company leaders for consideration. With approval, the finance manager might employ a broker or invest the funds themselves.
5. Prepares financial statements
Finance managers also prepare financial statements for businesses. They can prepare both internal and external financial statements, such as tax forms, investment forms or company finance reports. They prepare documents and file them in the appropriate place. Finance managers also retrieve some financial documents on behalf of the business or for company leaders to review. Finance managers typically have extensive experience with various financial documents and documentation requirements.
6. Ensures compliance with legal obligations
Finance managers also maintain a company's legal standing by identifying specific financial laws and regulations and ensuring company compliance. This can help the business avoid penalties or fees for non-compliance and ensure the business can remain operational. The finance manager researches current laws, learns new or updated laws and helps apply those laws to internal financial practices for the company. Financial managers are usually skilled in financial law and processes and can also prepare and file some legal financial documents on behalf of the company.
Finance manager skills
Finance managers require many skills to succeed in their job, including:
Mathematical skills: Financial managers can work with complex mathematical algorithms and formulas to determine trend lines, make predictions and account for the company's various financial resources. This requires strong mathematical skills and university-level mathematics training.
Interpersonal skills: Finance managers work with teams of financial professionals and typically interact frequently with the company's executives. This requires strong interpersonal skills like good communication, active listening and compassion or empathy.
Management skills: Finance managers help manage a company's assets, which can require significant time and personal management skills. They understand how to allocate time to different tasks, how to show discipline in their work and how to effectively manage financial assets.
Legal skills: Finance managers typically have some understanding of financial laws and how they apply to businesses. They often prepare and file legal paperwork and ensure business compliance with legal and financial standards.
Computer skills: Finance managers use computer software to track incomes and expenses, create charts and graphs, predict financial trends and organise company financial reports. This requires minimal computer skills in troubleshooting and common financial and operating software.
Research skills: Finance managers research financial trends, the cost of assets like tools or business and other financial needs or concepts. This requires strong research skills, including differentiating poor and viable resources, analysing information and preparing reports.
How to become a finance manager
Here are the steps you can take to become a finance manager:
1. Earn a bachelor's degree in finance
Earn a bachelor's degree in finance, economics or business management. Finance managers typically pursue degrees to establish a foundation of financial and management knowledge, including industry standards and tools. Consider a bachelor's degree in a financial major or business management to increase your competitive advantage as a job seeker. Employers typically require at least a bachelor's degree in finance management. This degree can take up to four years to complete, with the option to pursue a graduate degree upon completion. A master's degree requires an additional two to three years of study.
2. Gain financial experience
While earning your bachelor's degree, you can apply to entry-level finance positions with banks, investment firms or regulatory organisations. You can also look for internships in your area that offer an opportunity to establish a professional relationship with a local company, which may also provide an avenue for employment once you graduate. Some internships offer a wage, while others are unpaid and strictly for the experience. Gaining experience in finance while you finish your degree can help you learn to apply what you learn in the classroom in a finance position.
3. Earn a certification from the Financial Planning Standards Board
The Financial Planning Standards Board of Hong Kong is a regulatory organisation that oversees the professional standards in financial management and planning. Earning a CFP, or certified financial planner certificate, can help you learn more about the professional standards of financial management and improve your resume. Employers may look favourably at candidates with additional credentials, as they can display a candidate's commitment to professional development and the diversity of their skills. Consider pursuing a certification after you finish your degree to access more potential job opportunities.
4. Apply for finance management positions
Once you complete your degree, gain experience and pursue optional certifications, you can start applying to financial management positions. Consider the experience required for each position, as some finance manager jobs require between five and ten years of experience. The experience requirement typically varies depending on the value of assets under management. Create a resume that highlights your specific financial management skills and experience, including any certifications, internships or professional work experience in the financial industry.
How much do finance managers make?
A finance manager in Hong Kong can earn an average salary of around $40,02 2per month. The average salary can vary based on candidate experience and certifications. Typically, finance managers with a graduate degree have access to jobs with more assets under management, which can increase their earnings. Earning additional certifications can also help you earn more as a finance manager by increasing your skill set and ability to negotiate for a higher salary.
Salary figures reflect data listed on Indeed Salaries at the time of writing. Please note that none of the companies mentioned in this article are affiliated with Indeed.