Financial Management – It is not just about money!

Dr. John Patrick Ojwando
Published: August 2013

If you enjoy crunching numbers, exhibit an irresistible interest in the way firms or organisations do business, and above all, nurture solid interpersonal and communication skills, then Financial Management is the career to find your niche, writes Dr. John Patrick Ojwando.

Financial Management is a broad term applicable to a gamut of niche activities which merge financial and managerial skills at a workplace. This is because Financial Managers (hereinafter in this piece referred to as FMs and their profession – FM) are often called upon to interact and engage on a regular basis with people to find the best ways to go around complex business and financial situations that sprout from time to time. As advisers in a firm or organisation, the responsibilities falling at the desk of FMs revolve around assisting diverse departments to achieve smooth functioning through sound financial planning and strategies. Firms or organisations, both government and non- government engage FMs in a host of supervisory roles, oganising data, preparing financial reports, guidance on investment activities and execution of cash-management and strategies that seek to catapult the firm or organisation to realise their short and long-term agendas being the distinct responsibilities.

PATHWAYS

The success or efficient business operations rely to a large extent on the skills of FMs. Those with a firm grounding, experience and understanding of the operations of various departments stand a good chance to advance to the higher echelons of any firm or organisation. Some FMs often choose to move laterally to similar positions in other industries. Others with extensive experience and access to adequate capital may opt to ease themselves into their own firms and engage in consultancy. Here are some of the common paths pursued by FMs.

FINANCIAL MANAGER:

As a Financial Manager, your job involves preparation of special reports as set out by the regulatory authorities, overseeing the preparation of financial reports -income statements and balance sheets and the analyses of future earnings or expenditures, which describe, forsee and predict the firm’s or organization’s financial position. Other functions you may perform in such a position include supervision of accounts, and budget of diverse departments. The position can be found in firms or organizations of all sizes- from large international entities to small start ups

FINANCE MANAGER / TREASURER:

Typically, the position involves directing budgets as well as financial objectives of a firm or organization. Here, you will oversee the investment of funds and manage related risks, supervise cash management activities, address mergers and acquisitions and implement strategies that raise capital that will be used to sustain a firm or organisation during its expansion.

CREDIT MANAGER:

The world of credit managers revolve around supervising issuance of credit by establishing credit-rating criteria, determine credit ceilings and monitor collection of unsettled accounts. Financial and accounting systems for the banking transactions of multinational organisations are developed by managers who have specialisation in international finance.

FINANCE ANALYST:

Your role is pegged on helping firms meet their business and investment needs by monitoring and controlling the flow of cash receipts and their disbursements. Cash flow projections are essential in determining whether a firm or organisation is need of loans to meet cash requirements or decide how a firm should invest surplus cash.

RISK AND INSURANCE MANAGER:

Besides managing the insurance budget of a firm or organisation, a risk and insurance manager directs programmes that help minimise potential risks and losses for the firm or organisation from its financial as well as business operations.

OTHER OPTIONS:

FMs are also employed in financial institutions such as commercial banks, savings and loans associations, credit unions, mortgage and finance companies amongst others. Here, their duties will include but are not limited to lending, trusts, mortgages and investments. Sometimes, they may also be called upon to solicit business, authorise loans and provide direction to the investment of funds according to the laws and regulations of a country.

REQUISITE QUALIFICATIONS

The field of FM offers a slew of well paying pursuits for those with the requisite training and expertise besides a host of mouthwatering perks. Candidates with a degree in commerce, accounting, finance, economics or business administration stand a great chance of taking the FM mantle. A masters’ degree in commerce, business, economics or risk management is a welcome addition. The latter can help the aspirant steer ahead of competition in a market that continues to witness regular upheavals. Because of the practical component, most of these courses incorporate a short stint for internship or attachment to a firm or organisation for on job practical exposure. But the FM field is not all about academics. Analytical acumen, business know how of the latest finance methods besides computer literacy are highly valued by employers.

SKILL SETS

Because FMs are constantly called upon to interact and work with people on teams explaining complex financial information, it is incumbent upon any aspirant to exhibit or imbibe the following skills:

  • Be excellent in interpersonal and communication skills.
  • Be able to think creatively
  • Be astute in problem-solving
  • Be able to conjure and implement business strategies
  • Be broad minded with a solid understanding of business practices.
  • Keep abreast with the latest advances in technology
EARNINGS AND PERKS

Salaries in the FM sector vary according to the industry, location and size of the firm or organistion. If you land a job in a larger firm or organisation, chances are that you could be earning more than your counterparts in medium or smaller ones. Some organisations seek novel ways to retain their FMs. Such organisations do not peg their earnings on salary alone. A slew of incentives beckon FMs who rise through the ranks to hold senior management positions. One can also expect huge bonuses tagged with the job. However, the latter, a common feature is dependent on the size of the organisation and the skills of the employee.

THE BOTTOM LINE

FM is a complex and dynamic profession. Regular upgrades through training, workshops, seminars and conferences saddle the trail of those keen to make a career in this domain to keep abreast with the challenges the industry throws up. Secondly, professional certification is another area those seeking to expand their skills can explore. These can be acquired from a number of credible associations such as the Institute of Charted Accountants of India (ICAI), Institute of Certified Management Accountants (ICMA) and The Association for Financial Professionals (AFP), amongst others.FM job openings are determined by the skills being sought by the firm or organisation seeking to fill its vacancies. The career paths of FMs are directly related to the economy of a country as a whole and therefore face a number of obstacles. Mergers, acquisitions, and short term economic downturns reduce employment. However, as economies continue to grow, the need for financial expertise is bound to expand. New businesses are also being created even as established ones continue to grow or venture into newer areas.