You have probably read it,given an exam on it!
Now,do you really know how it works in the real world?
However, financial management is one of the most important functions, not just academically but practically in the industry.
Top 5 Long Run objectives of financial management
-Approving Financial decisions
-Business Financial Plan
-Creating Financial Statements
-Strategic Planning for business
Table of Contents
- Financial Management in a Nut shell
- Jobs in Financial Management
- Skills Required in Financial Management
- Recommended Qualifications
Financial Management in a Nut Shell
A very simple way of imagining about financial management, is to related with your mother! Yes!
You heard it right!
Similarly, just how a mother in an Indian household is responsible for making sure everything runs as per the monthly budget.
Also, financial managers can be thought of as the mothers of business.
So lets think of the practical activities that are a expected of you.
- Firstly, Business financial plan for a period.
- Secondly, making sure we have an optimum mix of funding.
- Thirdly, making sure we have something to take away, or profit maximisation
- Finally, make sure that we don’t cross the limit and live beyond our means.
Jobs in Financial Management
Now, lets explore what kind of roles are availble for you?
After all, there is no such role as financial management eh?
However, lets spend a minute first understanding the broad category of financial management activities
Strategic Financial Management
So,Without boring you to death! In street language, these are synonumus to big boys work.
So this includes activities like;
- Defining business objective and visions
- Finding new avenues for investing
- Taking financial decisions
- Mitigating risks
and you get the point right?
Tactical Financial Management
Alternativly,tactical financial management relates to short term activities.
So what does this include?
- Managing operations
- Making sure we execute the long term plans
- Taxes and regulation
- Consistent reporting and communication
All right! So now that we understand the broad classification lets look at some jobs in the real world, that exists.
Role Activity Finance Controller Financial Decisions Financial Planning Analysing Financial data for decisions Treasury Managing surplus capital or profits Financial Reporting Creating financial statements Financial Risk management Forecastign business risk
Hence, you can see how it does sound like motherly activities after all.
Salary in Financial Management
I know, you have been waiting for this!
However, financial management is infact a rewarding career, but lets look at some data anyways.
Now, don’t get to excited! Financial controller is very senior position in the department.
Also,reaching here generally takes about 10-12 years of expereince.
Alright! You can get excited here, because this would be the most common entry point in financial managent career path.
So, this is more of the accounting role and the salary mentioned here is for entry level positions in a medium size company.
Treasury usually is like becoming the lead actor of a movie! Why? Because its fancy, pays high and generally with some solid expereince, you can join the senior ranks in strategy.
Skills Required in Financial Management
So by now, you must have got a fair idea on what happens in financial management! By no means, can we say that the work is generic and static. Since there are so many variables and business are evolving constantly.
Top 3 Skills Required to Thrive in Financial Management Functions are:
No matter whether you are in treasury or controlling, you can’t surivive without accounting.
You have to get your hands on decision making skills and financial modeling is that skill.
You can read more about financial modeling- What is financial modeling
You are going to working constantly on data.
Also analysing them but it doesn’t stop there does it?
What good is the analysis ?,if you aren’t able communicate the information to the management?
So, do spend considerable time learning this art.
Also,You can read about how to make powerfull charts in excel.
Now, I’ll be honest with you here.
So technically speaking ,financial management is a part of every finance qualification.
However, if you do intent to expertise then my suggestion would be to consider the following additional qualifications