Financial Management: Salary, Scope and Career Options in 2024

Financial management is a critical aspect of running a business or organization. It involves the planning, organizing, directing, and controlling of financial resources to achieve the goals and objectives of the entity. In today’s competitive business environment, financial management is more important than ever. Let us explore the salary, scope, and career options for financial management in 2024.

What is financial management?

Financial management basically means managing the financial activities in an organization. These activities are essentially directed towards the betterment of the business and increased return-on-investment (ROI). The focus is on finding the capital sources through debt financing, venture funding, etc., and controlling the business transactions, fund allocation, and fund disbursement for financial stability and growth.

What are the various responsibilities in finance management?

In financial management, there are a wide range of tasks, including:

1. Budgeting and forecasting: Developing and managing budgets and financial forecasts to ensure that the organization’s financial goals are met.
2. Financial analysis: Analyzing financial data to identify trends and potential risks, and making recommendations for financial strategy.
3. Financial reporting: Preparing and presenting financial reports to management and other stakeholders, including balance sheets, income statements, and cash flow statements.
4. Cash management: Ensuring that the organization has the adequate cash flow to meet its financial obligations and take advantage of investment opportunities.
5. Investment management: Identifying and evaluating potential investment opportunities, such as stocks, bonds, and real estate, to maximize returns and minimize risk.
6. Risk management: Identifying, assessing, and managing financial risks that could impact the organization’s financial stability.
7. Compliance: Ensuring that the organization’s financial practices comply with all relevant laws, regulations, and accounting standards.
8. Treasury management: Managing the organization’s financial resources and working capital, including cash, investments, and debt.
9. Credit management: Managing an organization’s credit portfolio and assessing the creditworthiness of potential borrowers.
10. Cost management: Identifying and controlling costs to improve financial performance and profitability.
11. Strategic planning: Assisting senior management in the development and implementation of financial strategies to achieve the organization’s long-term goals.

It’s important to note that the specific responsibilities of a finance manager may vary depending on the size and type of organization they work for.

What is the scope of financial management?

The scope of financial management is wide and varied. It encompasses various aspects of financial management, such as budgeting, forecasting, financial analysis, financial reporting, and cash management. Financial managers are responsible for ensuring the financial stability and growth of their organization, as well as making strategic financial decisions. They also work closely with other departments to ensure that the organization’s financial goals are aligned with overall business objectives.

5 Best career options in financial management

This is a broad field with many career options. Some popular roles in financial management include:

1. Financial analyst: Financial analysts conduct research and analysis to help organizations make investment decisions.
2. Financial planner: Financial planners help individuals and businesses create and implement financial plans to achieve their goals.
3. Credit analyst: Credit analysts assess the creditworthiness of individuals and organizations to determine whether to extend credit or approve a loan.
4. Risk manager: Risk managers help organizations identify and manage potential financial risks.
5. Investment banker: Investment bankers help companies raise capital by underwriting and selling securities.

Other than the above-mentioned careers, there are many other options, such as personal finance advisor, financial manager, financial risk manager, private equity associate, hedge fund manager, senior accountant, private equity analyst, internal auditor, private banking analyst, insurance advisor, and information technology auditor.

What is the salary in financial management?

Financial management professionals are well compensated for their expertise. According to the Bureau of Labor Statistics, the median annual salary for financial managers was $131,710 in May 2021. Someone with good performance can earn as much as $208,000 per year, on average. However, it’s important to note that salaries can vary greatly depending on the industry, location, and years of experience.

Top financial management skills required

For a role in financial management tasks, there are several key skills that are necessary for success in this role. These include:

1. Analytical skills: The ability to analyze and interpret financial data, identify trends and potential risks, and make recommendations for financial strategy.
2. Strategic thinking: Strategic thinking is necessary to make decisions that align with the organization’s overall goals and objectives.
3. Communication skills: It is important to communicate complex financial information in a clear and concise manner to both technical and non-technical audiences and stakeholders.
4. Leadership skills: A professional in finance has to lead and manage a team of financial professionals, and work effectively with other departments and senior management.
5. Organizational skills: Planning and organizing financial activities, including budgeting, forecasting, and financial reporting are important for financial managers.
6. Technical skills: Someone in this field needs to be able to use financial software and tools, such as financial modeling software, to analyze and manage financial data.
7. Risk management: Identifying and assessing potential financial risks and developing strategies to mitigate them.
8. Knowledge of regulations and laws: Someone working in this position should be familiar with local, state, and federal laws and regulations related to financial management and reporting.
9. Knowledge of accounting principles: Understanding of Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).

The specific skills required for financial management may vary depending on the industry and type of organization. Additionally, as the business environment is constantly changing, it’s important to continuously develop their skills and stay up-to-date with new regulations, technologies and trends.

The career path of a financial management professional

The educational qualifications in this field is pretty straightforward, some of the basic requirements are as follows:

1. Bachelor’s degree: Bachelor’s degree in finance, accounting, or economics. A degree in finance will give you a strong foundation in financial theory and practice, including financial analysis, investments, and corporate finance. While a degree program focuses on the principles of accounting and financial reporting, including tax laws, auditing, and cost accounting.
2. Master’s degree: Master’s in finance can be beneficial for those who want to advance their careers in financial management. They equip you with the skills necessary not just to ensure that you are up-to-date on the technical aspects but also to build a business acumen. Here is the degree that would be very helpful for pursuing a career in finance.

Global Master of Science in Finance (Global MS in Finance) program 

The Global MS in Finance program from the Richard DeVos Graduate School of Management, is engineered around the most advanced financial theories, quantitative models, and industry practices. It will prepare you to meet requirements across a broad range of modern career opportunities in finance. Also, participants seeking the CFA (Chartered Financial Analyst) professional designation, will benefit from the Global MSF program curriculum with concepts that may assist with preparing for the exam. This program offers international participants a chance for OPT – Optional Practical Training program upon the completion of their MSF degree.

1. Professional certifications: Although often considered optional, professional certifications such as CPA (Certified Public Accountant), CFA (Chartered Financial Analyst), CMA (Certified Management Accountant) or FRM (Financial Risk Manager) can be beneficial for career advancement and increasing the chances of being hired.
2. Experience: Practical experiences in finance or accounting, such as internships or entry-level positions, is important for gaining the skills and knowledge necessary for a career in financial management.

There are some companies that prefer candidates with a specific type of degree or certification, while others may prefer candidates with significant experience.

In conclusion, financial management is a vital and well-compensated field with a wide scope and varied career options. With the economy and business environment constantly changing, the demand for financial management professionals is likely to continue to grow in the future.