Financial Managers

Summary

financial managers image
Financial managers are responsible for the financial health of an organization.
Quick Facts: Financial Managers
2015 Median Pay $117,990 per year
$56.73 per hour
Typical Entry-Level Education Bachelor's degree
Work Experience in a Related Occupation 5 years or more
On-the-job Training None
Number of Jobs, 2014 555,900
Job Outlook, 2014-24 7% (As fast as average)
Employment Change, 2014-24 37,700

What Financial Managers Do

Financial managers are responsible for the financial health of an organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization.

Work Environment

Financial managers work in many industries, including banks and insurance companies. Most financial managers work full time, and about 1 in 3 worked more than 40 hours per week in 2014.

How to Become a Financial Manager

Financial managers typically have a bachelor’s degree and 5 years or more of experience in another business or financial occupation, such as an accountant, auditor, securities sales agent, or financial analyst.

Pay

The median annual wage for financial managers was $117,990 in May 2015.

Job Outlook

Employment of financial managers is projected to grow 7 percent from 2014 to 2024, about as fast as the average for all occupations. As with other managerial occupations, jobseekers are likely to face competition because there are more applicants than job openings. Candidates with a master’s degree or certification should enjoy the best job prospects.

State & Area Data

Explore resources for employment and wages by state and area for financial managers.

Similar Occupations

Compare the job duties, education, job growth, and pay of financial managers with similar occupations.

More Information, Including Links to O*NET

Learn more about financial managers by visiting additional resources, including O*NET, a source on key characteristics of workers and occupations.

What Financial Managers Do

Financial managers
Financial managers perform data analysis and advise senior managers on profit-maximizing ideas.

Financial managers are responsible for the financial health of an organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization.

Duties

Financial managers typically do the following:

  • Prepare financial statements, business activity reports, and forecasts
  • Monitor financial details to ensure that legal requirements are met
  • Supervise employees who do financial reporting and budgeting
  • Review company financial reports and seek ways to reduce costs
  • Analyze market trends to maximize profits and find expansion opportunities
  • Help management make financial decisions

The role of the financial manager, particularly in business, is changing in response to technological advances that have substantially reduced the amount of time it takes to produce financial reports. Financial managers’ main responsibility used to be monitoring a company’s finances, but they now do more data analysis and advise senior managers on ways to maximize profits. They often work on teams, acting as business advisors to top executives.

Financial managers also do tasks that are specific to their organization or industry. For example, government financial managers must be experts on government appropriations and budgeting processes, and healthcare financial managers must know about topics in healthcare finance. Moreover, financial managers must be knowledgeable about special tax laws and regulations that affect their industry.

The following are examples of types of financial managers:

Chief financial officers (CFOs) are accountable for the accuracy of a company’s or organization’s financial reporting, especially among publicly traded companies. As head of a company’s entire financial department, they manage the lower level financial managers. They oversee the company’s financial goals, objectives, and budgets.

Controllers direct the preparation of financial reports that summarize and forecast the organization’s financial position, such as income statements, balance sheets, and analyses of future earnings or expenses. Controllers also are in charge of preparing special reports required by governmental agencies that regulate businesses. Often, controllers oversee the accounting, audit, and budget departments of their organization.

Treasurers and finance officers direct their organization’s budgets to meet its financial goals. They oversee the investment of funds and carry out strategies to raise capital (such as issuing stocks or bonds) to support the firm’s expansion. They also develop financial plans for mergers (two companies joining together) and acquisitions (one company buying another).

Credit managers oversee their firm’s credit business. They set credit-rating criteria, determine credit ceilings, and monitor the collections of past-due accounts.

Cash managers monitor and control the flow of cash that comes in and goes out of the company to meet the company’s business and investment needs. For example, they must project cash flow (amounts coming in and going out) to determine whether the company will have a shortage or surplus of cash. 

Risk managers control financial risk by using strategies to limit or offset the probability of a financial loss or a company’s exposure to financial uncertainty. Among the risks they try to limit are those that stem from currency or commodity price changes.

Insurance managers decide how best to limit a company’s losses by obtaining insurance against risks, such as the need to make disability payments for an employee who gets hurt on the job or the costs imposed by a lawsuit against the company.

Work Environment

Financial managers
Financial managers work closely with top managers and with departments that develop the data that financial managers need.

Financial managers held about 555,900 jobs in 2014. The industries that employed the most financial managers were as follows:

Finance and insurance 29%
Management of companies and enterprises 12
Professional, scientific, and technical services 11
Manufacturing 8
Government 8

Financial managers work closely with top executives and with departments that develop the data financial managers need.

Work Schedules

Most financial managers work full time, and about 1 in 3 worked more than 40 hours per week in 2014.

How to Become a Financial Manager

Financial managers
Financial managers usually have experience in another business or financial occupation such as a loan officer, accountant, auditor, securities sales agent, or financial analyst.

Financial managers typically have a bachelor’s degree and 5 years or more of experience in another business or financial occupation, such as an accountant, securities sales agent, or financial analyst.

Education

A bachelor's degree in finance, accounting, economics, or business administration is often the minimum education needed for financial managers. However, many employers now seek candidates with a master’s degree, preferably in business administration, finance, or economics. These academic programs help students develop analytical skills and learn financial analysis methods and software.

Licenses, Certifications, and Registrations

Professional certification is not required, but some financial managers still get it to demonstrate a level of competence. The CFA Institute confers the Chartered Financial Analyst (CFA) certification to investment professionals who have at least a bachelor’s degree, 4 years of work experience, and pass three exams. The Association for Financial Professionals confers the Certified Treasury Professional credential to those who pass an exam and have a minimum of 2 years of relevant experience.

Work Experience in a Related Occupation

Financial managers usually have experience in another business or financial occupation. For example, they may have worked as a loan officer, accountant, securities sales agent, or financial analyst

In some cases, companies provide formal management training programs to help prepare highly motivated and skilled financial workers to become financial managers.

Important Qualities

Analytical skills. Financial managers increasingly are assisting executives in making decisions that affect their organization, a task which requires analytical ability.

Communication skills. Excellent communication skills are essential because financial managers must explain and justify complex financial transactions.

Detail oriented. In preparing and analyzing reports such as balance sheets and income statements, financial managers must be precise and attentive to their work in order to avoid errors.

Math skills. Financial managers must be skilled in math, including algebra. An understanding of international finance and complex financial documents also is important.

Organizational skills. Financial managers deal with a range of information and documents and so they must stay organized to do their jobs effectively.

Pay

Financial Managers

Median annual wages, May 2015

Financial managers

$117,990

Operations specialties managers

$108,260

Total, all occupations

$36,200

 

The median annual wage for financial managers was $117,990 in May 2015. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $63,020, and the highest 10 percent earned more than $187,200.

In May 2015, the median annual wages for financial managers in the top industries in which they worked were as follows:

Professional, scientific, and technical services $140,160
Management of companies and enterprises 136,490
Manufacturing 117,310
Finance and insurance 113,040
Government 107,120

Most financial managers work full time, and about 1 in 3 worked more than 40 hours per week in 2014.

Job Outlook

Financial Managers

Percent change in employment, projected 2014-24

Operations specialties managers

7%

Financial managers

7%

Total, all occupations

7%

 

Employment of financial managers is projected to grow 7 percent from 2014 to 2024, about as fast as the average for all occupations. However, growth will vary by industry.

Services provided by financial managers, such as planning, directing, and coordinating investments, are likely to stay in demand as the economy grows. The United States remains an international financial center, meaning that the economic growth of countries around the world will likely contribute to employment growth in the U.S. financial industry. In recent years, companies have been accumulating more cash on their balance sheets, particularly among those with operations in foreign countries. As globalization continues, this trend is likely to persist. This should lead to demand for financial managers, as companies will be in need of cash management expertise.

The depository credit intermediation industry, which includes commercial banking and savings institutions, employs a large percentage of financial managers. As bank customers increasingly conduct transactions online, the number of bank branches is expected to decline, which should limit employment growth in this sector. However, employment declines here are expected to mainly affect clerical occupations, such as tellers, rather than financial managers. From 2014 to 2024, employment of financial managers is projected to grow 6 percent in this industry.

Job Prospects

As with other managerial occupations, jobseekers are likely to face competition because there are more applicants than job openings. Candidates with expertise in accounting and finance—particularly those with a master's degree or certification—should enjoy the best job prospects. An understanding of international finance and complex financial documents is important.

Employment projections data for financial managers, 2014-24
Occupational Title SOC Code Employment, 2014 Projected Employment, 2024 Change, 2014-24 Employment by Industry
Percent Numeric

SOURCE: U.S. Bureau of Labor Statistics, Employment Projections program

Financial managers

11-3031 555,900 593,500 7 37,700 [XLSX]

State & Area Data

Occupational Employment Statistics (OES)

The Occupational Employment Statistics (OES) program produces employment and wage estimates annually for over 800 occupations. These estimates are available for the nation as a whole, for individual states, and for metropolitan and nonmetropolitan areas. The link(s) below go to OES data maps for employment and wages by state and area.

Projections Central

Occupational employment projections are developed for all states by Labor Market Information (LMI) or individual state Employment Projections offices. All state projections data are available at www.projectionscentral.com. Information on this site allows projected employment growth for an occupation to be compared among states or to be compared within one state. In addition, states may produce projections for areas; there are links to each state’s websites where these data may be retrieved.

Career InfoNet

America’s Career InfoNet includes hundreds of occupational profiles with data available by state and metro area. There are links in the left-hand side menu to compare occupational employment by state and occupational wages by local area or metro area. There is also a salary info tool to search for wages by zip code.

Similar Occupations

This table shows a list of occupations with job duties that are similar to those of financial managers.

Occupation Job Duties ENTRY-LEVEL EDUCATION 2015 MEDIAN PAY
Accountants and auditors

Accountants and Auditors

Accountants and auditors prepare and examine financial records. They ensure that financial records are accurate and that taxes are paid properly and on time. Accountants and auditors assess financial operations and work to help ensure that organizations run efficiently.

Bachelor's degree $67,190
Budget analysts

Budget Analysts

Budget analysts help public and private institutions organize their finances. They prepare budget reports and monitor institutional spending.

Bachelor's degree $71,590
Financial analysts

Financial Analysts

Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.

Bachelor's degree $80,310
Insurance sales agents

Insurance Sales Agents

Insurance sales agents contact potential customers and sell one or more types of insurance. Insurance sales agents explain various insurance policies and help clients choose plans that suit them.

High school diploma or equivalent $48,200
Insurance underwriters

Insurance Underwriters

Insurance underwriters decide whether to provide insurance and under what terms. They evaluate insurance applications and determine coverage amounts and premiums.

Bachelor's degree $65,040
Loan officers

Loan Officers

Loan officers evaluate, authorize, or recommend approval of loan applications for people and businesses.

Bachelor's degree $63,430
Personal financial advisors

Personal Financial Advisors

Personal financial advisors provide advice on investments, insurance, mortgages, college savings, estate planning, taxes, and retirement to help individuals manage their finances.  

Bachelor's degree $89,160
Suggested citation:

Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2016-17 Edition, Financial Managers,
on the Internet at http://www.bls.gov/ooh/management/financial-managers.htm (visited May 02, 2016).

Publish Date: Thursday, December 17, 2015