In our competitive global economy, it’s essential for organizations to carefully direct their budgets to meet their financial goals and outpace their competitors. That’s precisely where the finance executive comes in. As a highly experienced senior-level official, the finance executive allocates funds and finds innovative strategies to raise capital so the company can grow. Finance executives play a prominent role in managing the organization’s revenue, expenditure, investments, and other money matters in accordance with the industry’s regulations. It’s their duty to make key financial decisions that minimize risk, lower unnecessary costs, boost financial performance, and maximize profit. Finance executives, also called finance officers or managers, take charge of cash flowing through financial institutions, private corporations, government agencies, manufacturing firms, non-profits, and more.
Salary
According to the Bureau of Labor Statistics, finance executives are rewarded for their hard work with an average annual salary of $130,230, which is equivalent to a whopping mean hourly wage of $62.61. Finance executives leading cash flow in depository credit intermediation earn less than average at $105,720, but those working for securities and commodity brokerages make significantly more on average at $181,280 annually.
Beginning Salary
When first rising to the top as finance executive, you’ll likely land in the bottom tenth percentile of earnings with a decent yearly salary around $62,480. However, it’s important to remember that finance executives who work for large companies and have years of experience under their belts often make upwards of $207,580 every year.
Key Responsibilities
Finance executives hold a position of significant responsibility in maintaining the optimal monetary health of their organization. A company’s finance executive is the ultimate authority for directing all financial transactions to ensure profitability. On a typical day, finance executives could be responsible for allocating available funds, determining the organization’s budget needs, managing working capital, preparing business activity reports, tracking market trends, reviewing company finance reports, and helping the CEO find ways to lower costs. Finance executives will also play a supervisory role in overseeing the work of the entire financial staff.
Necessary Skills
Being successful as a finance executive will require that you have strong analytical skills for forming good decisions that affect the well-being of the entire company. Finance executives must be skilled communicators with the interpersonal skills necessary to collaborate with other executive team members for leadership. Having good organizational skills with a key attention to detail is important for finance executives to maintain meticulous financial reports of the company’s income and expenses. Finance executives should have a high level of mathematical and accounting ability to accurately balance even tricky financial transactions. It’s also essential that finance executives have the managerial skills to motivate the productivity of their staff.
Degree and Education Requirements
Before you can advance into the upper-level role of finance executive, you’ll need to lay the groundwork with at least a four-year bachelor’s degree from an accredited higher learning institution. Most aspiring finance executives choose to obtain their undergraduate major in finance or accounting, but a degree in business administration, economics, or mathematics could be beneficial too. Regardless of your major, make certain you’re taking classes that teach the best financial analysis and management practices. The majority of finance executives today have continued on to graduate school for a master’s degree. Earning a Master of Accountancy (MAcc), Master of Science in Finance (MSF), or MBA could facilitate faster promotion.
Pros and Cons of the Position
As with any other career, reaching the goal of becoming a finance executive will come with its fair share of advantages and drawbacks. On the positive side, finance executives make extremely high salaries that quickly pass the six-figure mark and have no upper limit. Finance executives have the ability to apply their leadership prowess in virtually any industry because all companies run on money. Being a finance executive could place you on the pathway towards becoming the Chief Financial Officer (CFO) for even more power too. On the other hand, finance executives deal with a high-stress job where the company’s financial health rests on their shoulders. Competition for finance executive jobs is heated thanks to the vast supply of business school graduates. Also, most companies won’t promote or hire a finance executive that doesn’t have at least five years of management experience.
Getting Started
Earning the role of finance executive is all about gaining the right experience and building a strong network of professional contacts. While still earning your degree, it’s essential that you take advantage of internships, business consulting projects, and finance co-operatives to develop your real-world knowledge. Then, you’ll likely have to start at the bottom in entry-level positions and determinedly work your way up over time. Many finance executives get their start by working as accountants, auditors, loan officers, financial analysts, and securities agents. It could be just the stepping stone you need for a managerial-level promotion. Making yourself stand out among competitors by pursuing certification is advised. The Chartered Financial Analyst (CFA) credential is one of the world’s most prestigious. You’ll need to have at least a bachelor’s degree, four years of experience, and passing scores on three CFA Institute exams.
Future Outlook
Projected job change for finance executives will continue to be positive. The BLS reports that the employment of finance executives and managers will grow about as fast as average at nine percent, thus creating around 47,100 new jobs before 2022. It’s believed that the improving economy, increasing globalization of business, and stricter financial regulations will spur on the growth. More companies will be hiring finance executives to oversee their expansions or mergers and acquisitions process. Even though some organizations outscore other accounting operations, finance executives are still in demand to supervise them. Finance executives can expect favorable prospects, but competition will be intense since openings are few in nature.
Overall, finance executives are tasked with guaranteeing an organization has the monetary funds and investment tools necessary to obtain profitable success. Finance executives usually oversee huge sums of revenue streams for large, multi-national companies. Many finance executives are accounting graduates who’ve risen to the top of the corporate food chain to regulate the company’s cash flow. If you work well under pressure and love balancing the dollar signs, you may want to consider entering the lucrative and rewarding role of finance executive.
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