Rajesh Pathak Jan 25, 2024
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Roles And Responsibilities of A Finance Manager

Financial management is key to the effective functioning of an organisation and the finance manager plays a crucial role in organisations of all sizes. Finance managers work closely with other departments and ensure that everything runs smoothly. They help other members of their organisation understand the numbers by breaking down and simplifying complex finance reports.

According to the U.S. Bureau of Labor Statistics (BLS), job opportunities for financial managers are projected to grow by 16% between 2022 to 2032. This growth rate is faster than the average for all other occupations. This is due to the increasing complexity of financial regulations, the globalisation of business, and the need for skilled financial professionals to help organizations manage their finances effectively.

The need for a knowledgeable workforce to assess investment opportunities and make financial decisions will continue to drive demand for careers in finance. With a higher level of education, industry-recognised certification and experience finance managers can pursue advanced roles in this field to take on more responsibilities with a higher pay scale. 

The Role of a Finance Manager

A Finance Manager's role is dynamic and their duties differ based on the industry they are working. Pursuing Top Finance Certifications will prepare you for challenging roles in the finance sector. There are various short-term finance courses available that will upskill you and enhance your career prospects in Finance. The important roles of a finance manager include:

  • Coordinating the financial aspects of a company, including managing budgets, cash flows and expenditures.
  • Providing input related to funding requests or strategic decisions about mergers and acquisitions.
  • Preparing financial reports such as profit projections in layman's terms by paying attention to detail.
  • To analyse the market trends and competitor's moves to expand the organisation's opportunities.
  • To stay updated about the latest trends in the stock markets. 
  • To oversee budgetary allocation and focus on maximising the finances of the organisation. 
  • To know the best interests of the company’s shareholders.
  • Handle financial negotiations with banks and other financial institutions.
  • Develop long-term business plans based on financial reports.
  • Predicting future financial trends and analysing associated financial risks.

Key Responsibilities of a Finance Manager

Finance managers are responsible for maintaining financial records, managing budgets and analysing financial reports to help make financial decisions. If you are looking forward to starting your career in finance you should be aware of the responsibilities of  Finance Managers. Some of the critical responsibilities of a financial manager include:

  • Fund Raising
  • Allocation of Funds
  • Profit Planning
  • Understanding Capital Markets

Fund Raising

Finance managers help the organisation raise funds through equity and debt. It is one of the primary responsibilities of finance managers to strike a balance between equity & debt and maintain the right amount of debt-equity ratio. It is necessary to keep enough cash and maintain liquidity to meet the organisation's daily requirements. The finance manager should know how to operate on a strategic and tactical level to maintain financial stability.  

Allocation of Funds

Once financial managers raise funds, the next step is to allocate the funds optimally. Diversification of assets and proper allocation of funds is a critical financial decision that influences the overall organisational activities. It is the responsibility of the finance managers to ensure the fund is allocated in the right manner across the various departments of the organisation. The finance manager has to communicate effectively with other departments to avoid misappropriation of funds. The finance managers also have to take into consideration these factors for the allocation of funds:

  • The growth capability and size of the organisation.
  • Long-term or short-term assets of the organisation.
  • Mode of fundraising and the nature of stakeholders.

Profit Planning:

Profit earning is essential for the survival of any organisation. Profit is generated by various factors, including pricing, the competition between companies in an industry, the mechanism of supply and demand, and cost and output. It is the responsibility of the finance manager to find ways to boost the profitability of the organisation by evaluating fixed factors of production and calculating opportunity costs.  

Understanding Capital Markets:

The capital market is a medium where savings and investments are channelled between suppliers and those in need. Financial managers need to have a clear understanding of the functioning of capital markets and should stay updated about the latest trends in the capital market while giving financial advice to the board of directors. It is the responsibility of the finance managers to set long-term and short-term financial goals for the organisation by calculating 

the future risks and implementing strategies to mitigate those risks.

Impact of Generative AI On Finance Managers

The duties and responsibilities of the Finance Manager are increasing with each passing year and if you want to fit into the emerging role of finance manager, you have to upgrade your skills to keep up with the competition. It is also to be noted that the role of Generative AI in the finance sector is likely to expand in the upcoming years and will impact the role of finance managers. 

As the world is getting more digitalised and technology-driven finance, managers should have technical skills and must be comfortable using the latest technologies. Having the adaptability to keep up with the latest technology will enhance the career prospects of a Finance Manager. Soon, Generative AI can assist in various tasks, including automating routine financial reporting and analysis tasks. As a result, Finance Managers will have to gain expertise in AI-powered tools in the upcoming years. 

According to Marcus Philips, founder and managing director of mortgages.co.nz, “AI-Powered Ethical Investing, a product of generative AI, has completely reshaped the function of finance managers. This novel method entails employing AI algorithms to evaluate social, ethical, and environmental aspects in addition to financial data while making investment decisions.

Finance managers now have a special duty to include AI's ethical analysis in their plans, to match investments with moral and sustainable objectives. This entails striking a balance between financial returns and dedication to ethical investing, and it calls for both conventional financial research and a thorough grasp of AI-generated insights.”

Critical Skills Required For Emerging Role Of Finance Manager

In addition to financial management skills, the following critical skills are required for finance managers to excel in their profession: 

  • Numerical skills:Since finance managers are working with huge amounts of money on a daily basis, they should have strong numerical skills to monitor financial transactions. Errors in recording numbers could lead to huge losses and having strong numerical/ mathematical skills reduces the chance of errors and brings efficiency in financial operations. 
  • Analytical skills:Finance managers should have analytical skills to evaluate the financial performance of the organisation and in making financial decisions. Having strong analytical skills will help finance managers to think logically while implementing financial strategies. 
  • Interpersonal skills: Finance Managers should have good interpersonal skills to maintain good communication flow with all the departments in the organisation. Having effective communication skills and other interpersonal skills will help finance managers address financial constraints and ease the process of decision-making and budgeting. 
  • Problem-solving skills: Problem-solving skill is an inevitable skill required for finance managers.  Having problem-solving skills will help in dealing with a wide range of information and financial documents effectively and in making sound financial decisions.  
  • Leadership skills : Leadership skills help finance managers handle challenging situations and coordinate the team in a better way. Having financial managers with dynamic and solution-oriented mindsets will benefit organisations in overcoming risks. 
  • Time management skills:Time Management skills are essential to meet deadlines. Excellent time management skills will help finance managers provide effective solutions and make crucial decisions on time. 

To Sum Up:

According to the U.S. Bureau of Labor Statistics, 69,600 openings for financial managers are projected each year in this decade. Finance Manager is a lucrative career that offers job security and the key to thriving in this profession is upskilling. As the volume of financial data continues to increase, generative AI will become an increasingly important tool for making informed decisions and the Finance Manager has to stay equipped to handle AI tools to speed the process of decision-making. Some of the roles and responsibilities are likely to get reduced and additional responsibilities will be added in the upcoming years as generative AI keeps bringing revolutionary changes in the world of Finance. 

Read More : Accounting vs Finance: Which One's Right for You?

Locations Where Edoxi Offers Finance Certification Courses 

Here is the list of other major locations where Edoxi offers Finance Certification Courses

Finance Courses in Dubai | Finance Courses in QatarFinance Courses in Sharjah | Finance Courses in Muscat | Finance Courses in Bahrain

IT Trainer

Rajesh is a Microsoft certified trainer with more than five years of experience. He plays a vital role in streamlining our enterprise software training programs. As a continuous learner with an unrelenting drive to refresh his IT skills, Rajesh always keeps an eye on the latest software releases.

His adaptable approach to learning navigates the efforts of his students in the right direction, leveraging maximum results with efficiency. Moreover, he is enthusiastic about nurturing the students' skills in a collaborative learning environment. 

He has helped hundreds of professionals hone their skills in Microsoft Office Suite, Tally, Advanced Excel Formulas, VBA, Busy Accounting Suite, Quickbooks, Power B I, and Zoho Books. In addition, he has the expertise in training individuals from global institutions like Parul University, Techno India University, GD Goenka University and Sharda University.