Not only to raise the finance of business, finance manager will also do many other works for. The financial manager is not just an expert at financial projections, s/he must also have a grasp of the accounting systems in place and the strategy of the business over the coming years. In financial management, finance manager is chief authority. S/he is also responsible for financial planning and record-keeping, as well as financial reporting to higher management. Financial managers typically need at least a bachelors degree in business, economics, or a related field. The CFO is the head of the financial department and is responsible for all of the same things as his/her subordinates, but is also the person who has to sign off that all of the company's financial statements are accurate. Financial managers typically need 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. This is a delicate dance between short-term and long-term responsibilities. The finance manager uses a number of tools, such as setting the cost of capital (the cost of money over time, which will be explored in further depth later on) to determine the cost of financing.Īt the same time that this is going on, the financial manager must also ensure that the business has enough cash to pay upcoming financial obligations without hoarding assets that could otherwise be invested. There is a cost to investing money, either the opportunity cost of not investing it elsewhere, the cost of borrowing money, or the cost of selling equity. The finance manager will use data analyses and educated guesses to approximate the value, but it's extremely rare that s/he can be 100% sure of the future cash flows.įiguring out the value of an operation is one thing, but it is another thing to figure out if it's worth financing. This is a lot tougher than it sounds because there is no accurate financial data for the future. The finance manager is responsible for knowing how much the product is expected to cost and how much revenue it is expected to earn so that s/he can invest the appropriate amount in the product. The development of a new product, for example, requires an investment of capital over time. The manager is responsible for figuring out the financial projections for the business. This involves allocating money to different projects and segments so that the business can continue operating, but the best projects get the necessary funding. The manager is responsible for managing the budget.

The structure of the company varies, but a financial manager is responsible for the same general things across the board. The head of the financial operations is called the chief financial officer (CFO).

The role of a financial manager is a complex one, requiring both an understanding of how the business functions as a whole and specialized financial knowledge.

Financial manager definition