Financial Management Salary

Individuals who desire a career in financial management need to possess a variety of skills. Excellent financial managers are vital to the success of organizations. They are responsible for overseeing the financial activities of a firm, such as financial reporting, cash management activities, direct investment activities, and developing financial strategies for an organization to implement over the long-term.

Financial management positions can be challenging and involve a great deal of responsibility. Individuals who possess business degrees and have finance or accounting experience tend to enjoy financial management positions the most. There are many different areas that fall under the financial management umbrella, and duties can vary from one position to the next.

Salary Overview

There are many factors that come into play when calculating financial management salaries. For example, the size of the firm is a determining factor. Large firms tend to pay employees higher salaries than small firms. Another important factor in salaries is the industry and location in which financial managers work.

Financial managers can be spread throughout many industries, but approximately 31% of them work in the finance and insurance industries.

According to the Department of Labor Statistics, the median salary for financial managers was $113,730 in 2009. This excludes all stock options and bonuses. The top 10% earned more than $138,010. The middle half of workers earned between $73,530 and $101,190. The lowest 10% earned less than $54,760.*

*According to the BLS, http://www.bls.gov/oco/

Financial managers who work in the investment management industry earn the highest salaries. Those who manage companies and enterprises make the next highest salaries. Financial managers who work in the insurance industry fall right after company managers, and those who work for the government typically earn the lowest.

Financial managers tend to enjoy very lucrative benefits, such as an expense account, the use of a company car, company stock options, and annual performance bonuses. They also receive standard medical, health, life insurance, and 401(k) benefits.

Job Description and Outlook

Financial management positions are very broad. Job descriptions can vary per industry and firm size. Individuals with careers in financial management can be controllers, chief financial officers, treasurers, credit managers, cash managers, insurance managers, branch managers, and risk managers.

Controllers oversee the departments that prepare financial reports and special reports that are required by regulatory authorities. The audit, budget, and accounting departments are often under the direct supervision of the controller.

Chief Financial Officers (CFOs) often perform the same duties as controllers. However, they may be responsible for more departments than controllers. Usually, all finance and accounting departments have to follow the chain of command and report to the CFO.

Treasurers are responsible for an organizations budget. They ensure that all of the firm’s financial obligations are met. They also oversee the firm’s investments, are responsible for cash management activities, participate in mergers and acquisitions, and formulate capital-raising strategies.

Credit managers usually oversee the credit department. This department is responsible for establishing a firm’s credit terms, issuing new credit, and determining credit ceilings.

Cash managers oversee the flow of incoming and outgoing cash. They monitor cash disbursements and receipts, and ensure that firms have the necessary cash on handle to meet its financial obligations.

Insurance managers oversee a firm’s insurance policies and determine if it adequately covers possible losses that are associated with risks. They also oversee insurance benefits that are available to employees.

Branch managers are responsible for managing different branches. They administer all of the duties that are associated with banks, such as approving bank loans, establishing relationships with community businesses, approving line of credit applications, and hiring bank personnel.

Risk managers are responsible for analyzing and finding ways to reduce an organization’s operational risks. They typically supervise risks analysts.

According to the Bureau of Labor Statistics, employment for financial managers is expected to grow at the same rate as growth for all other occupations. An 8% growth rate is expected through 2018.*

*According to the BLS, http://www.bls.gov/oco/

Competition for financial management positions is expected to be fierce. Individuals with advanced degrees are expected to have the best employment opportunities.

Training and Educational Requirements

The minimum educational requirement for financial management positions are bachelor’s degrees in finance, accounting, business administration, or economics. Increasingly, employers are requiring applicants to have master’s degrees in the above subjects to be considered for employment.

Financial management careers usually require individuals to have several years of work experience in finance or accounting positions. However, there are some companies that offer entry-level financial management training programs. These programs prepare individuals to come financial managers in the future.

Certifications

There are no certifications required for financial management positions. However, because of previous finance and accounting backgrounds, many individuals possess certifications already or they are encouraged by there employers to seek voluntary certifications.

Professional Associations

The American Institute of Certified Public Accountants (AICPA) prepares and offers the exams for the Certified Public Accountant license.
The Institute of Management Accountants offers the Certified Management Accountant license.
The CFA Institute offers the Charted Financial Analyst designation,
The Association for Financial Professionals offer the Certified Treasury Professional certification.

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