8 skills you need in a Finance Manager

Finance and its management is a very key function in an organization. A prudent finance manager will always keep the finances of the company in check, ensure that the company can make payroll, and pay its creditors and vendors on time. They will also play a key role in maintaining the organization’s financial health by ensuring that debt is manageable and capital is raised on favorable terms. 

A finance manager is a very strategic role that requires both functional and soft skills to excel, which is why pursuing a PGDM in finance is always a good idea. However, besides education, here’s a list of 8 important tips that can help you shape your career in finance and become a very effective finance manager:  

Have a keen understanding of Organizational Strategy and Growth Plans 

A great finance manager must understand all aspects of the business, including the sales of the company, the cost incurred for attaining the sales and topline, the statutory, general, and administrative expenses that the company incurs, its employee cost, the recurring costs per month, and so on. He should also know the company’s growth plans and monitor all the key metrics to ensure that the organization’s financial health is maintained at the desired levels. He must also keep a tab on the best sources of funding possibilities for restructuring debt and periodically check the investments made by the company to encash opportunities wherein the return is significant. 

Be a proactive professional and a smart negotiator: – 

 Finance Managers have to be vigilant every day. They must keep a tab on the business’s financial health and make business decisions quickly. They cannot leave it for someone else or take too much time to respond to a situation. They must make plans to ensure faster collection of receivables, negotiate favorable terms with vendors, and work with internal department heads to keep the organizational spending at the desired level. They must consistently exercise their negotiation skills with all stakeholders, including internal department heads, vendors, creditors, etc., to optimize available cash and capital. 

Be Analytical and Tech-Savvy: 

Organizations of today have modernized their applications and technology. A Finance manager must be able to deal with such ERP/ financial systems, which are often on the cloud and offered in ‘software-as-a-service’ mode. Such systems enable the finance manager to work remotely or from anywhere while being completely updated on the organization’s financial transactions. A smart financial manager must be able to deal with such systems, use in-built reports, work with technology teams/vendors to customize reports/ information formats that he may need, and use the system to make swift and well-informed decisions. He must also be analytically inclined to slice and dice data, view it from various perspectives, and make inferences that would enable him to quickly decide on the best course of action for the organization’s financial health.    

Must have in-depth knowledge of accounting principles, corporate taxes, financial regulations and compliances: – 

A finance manager must have a good understanding of accounting principles and important standards and practices to ensure proper filing of financials as and when required. He must also understand applicable corporate taxes. He must be well versed with financial regulations and compliances that must be adhered to. He must be capable of presenting the financials to the relevant stakeholders, including investors, and answering questions about the same, if any. 

Be a Team Player and Good Coach/ Mentor to your Team-mates 

Finance is a highly critical function in an organization. You need to be a mature professional as you are privy to sensitive information from an organization’s point of view. A good finance manager is adept at his job and seeks to build a team of lieutenants he can trust. He must coach and mentor them on not only the knowledge aspects of the job but also the behavioral aspects. He must nurture a sense of values, ethics, and behaviors considered the bedrock of good financial management. By doing so, he can create a great team and always ensure the necessary continuity. Managing Finances can be stressful, and a finance manager needs downtime. To give himself time to unwind, he must be a team player and teach the right values to create a great team. 

Be a good communicator and be transparent: 

If the finance manager is a good communicator, he can enlist what he needs from the team and from the management. That makes the task of managing the finances of an organization easier than otherwise. Since every number in financial management and all key metrics will impact the organization and its stakeholders in multiple ways, a finance manager must ensure that he is transparent and does not try to hide anything that is concerning or needs immediate action. A good finance manager ensures that the company’s investors, vendors, creditors, and employees trust the company at all times and perceive it as a clean and trustworthy entity with which to do business. 

Be open to new ideas and intangible benefits to the brand: – 

A finance manager must be open to new ideas. Many a times, some ideas may not seem to clearly generate tangible returns but may help the organization to build a better brand and connect well with its stakeholders in the long-term. A finance manager must have the ability to see the bigger picture and sanction such investments by the organization even if the returns on the same are not visible in the immediate future. He must also be open to technological advancements and modernization initiatives. These include automation of financial processes, adoption of cloud for financial systems, and ensuring ubiquitous access of financials to key strategic management team in the organization as a means to accelerate decision making and ensure growth of the top-line and bottom-line.

Be constantly updated and imbibe best practices: – 

In the world of finance, there are various types of mistakes that are made. In terms of the impact of the mistakes, some are negligible but others may be catastrophic to the business. A finance manager must be constantly updated on the happenings in the financial world. He must have in-depth knowledge of any mistakes or errors, even if they are inadvertent, and try to convert the learnings from it into lessons for the organization that he is working in. He must use such learning to create best practices and risk mitigation strategies so that such mistakes don’t happen in his organization and the financials are robust at all times. 

The above 8 tips are a good start for a finance manager to imbibe in his journey towards becoming a CFO or a great finance manager. In addition to all this, a finance manager must constantly learn about latest best practices, network with his peers to understand financial management across industry types, and be part of financial communities (community of chartered accountants, CFA community etc.) to keep enhancing his knowledge and skills and help his organization to evolve along with him. To get started on this journey, consider pursuing a PG diploma in finance now!