How to Become a Finance Manager: 4 Soft Skills You Can Develop to Lead

The role of a finance manager is to analyze financial data. They use their findings to create financial forecasts and reports. They also uncover insights to make the organization perform better. A successful finance manager will reduce costs and maximize the organization’s profits. They often work alongside key financial stakeholders. These include credit managers, risk managers, and loan officers. The financial guidance they provide can influence business plans for the company.

Advancements in financial management software have made financial tracking and forecasting available in real time. The software also helps with effective financial reporting. A good finance manager will use the latest technologies to complete financial analysis. This analysis allows them to provide valuable insights to the organization. Common tools include risk assessment software, bookkeeping software, and financial planning software².

Finance managers need to stay compliant with government regulations. Preparing accurate tax and financial accounting records is a legal requirement for businesses. It's also necessary to improve financial management and performance. Some organizations, such as the US Department of Defense, have specific regulatory requirements. Financial managers need to understand and adhere to all industry rules and standards.

Many finance managers will help manage all aspects of an organization's financial performance. Some decide to specialize in managing investments or capital budgeting. You can also specialize in international finance or offer strategic financial advice.

Finance managers are required in both private and public organizations. These include commercial companies, non-profits, government departments, and other institutions such as schools. If you want a job with a varied career pathway, becoming a finance manager is a great choice.

Finance managers need the right hard skills. These include financial planning, financial risk analysis, and cash flow tracking. But to take your performance to a higher level, it’s essential you also develop the right mix of soft (human) skills. Let’s discuss some of the key soft skills.

Communication

Communication is a key skill that finance managers must have. Finance managers are required to speak, write, and present important financial information clearly. They will communicate with co-workers, clients, and other stakeholders. This may require translating complex financial jargon into simple terms. That's important because decisions will be made based on their information and recommendations. Thankfully, clear and precise communication is a skill that can be improved. Personal coaching (and practice!) is one of the best ways to develop.

Organization

Financial managers need to analyze large amounts of information. This requires them to have excellent organizational skills. When dealing with lots of financial data they need to have the ability to sort it accurately so they can make sense of it. They also need to stay ahead of financial deadlines, such as end-of-year reporting. Having excellent systems in place will help you to become a better financial manager. Finance managers now have access to advanced financial technologies that make this easier. However, no software can replace effective time management skills.

Leadership

Finance managers who want to progress up the ladder need leadership skills. When promoted to manage a team you will require leadership skills. To lead and inspire you will need to set financial targets and then create a strategy for how to achieve your goals. In a more senior role, you need to be able to mentor more junior team members. This will involve leadership as well as great communication skills. Leadership is a skill that can be improved through feedback and coaching. Observing the leadership style of people you admire can also be helpful.

Attention to Detail

Finance managers must pay close attention to financial data. They must have the ability to find and correct errors in the reports they analyze. This is important because inaccurate data can lead to bad financial forecasting and reporting. Having excellent attention to detail ensures your records are compliant with all regulations. Failure to do so can result in financial losses, fines, and reputational damage. Learning to stay on top of details is a skill that can be developed over time by establishing effective systems.

Developing soft skills such as communication and organization is critical for a finance manager. It can boost job satisfaction and even increase your annual salary. If you want to improve your career opportunities spend time developing soft skills. When you combine your industry knowledge with soft skills you can take your performance to the next level.

At Fingerprint for Success (F4S), we have over 20 years of experience in coaching people to achieve their professional goals. We help people develop soft skills by using analytics tools to gain self-awareness of the skills they have, and the ones they need to sharpen.

Once you've taken the F4S free assessment, you can set your unique goals. Then, Coach Marlee will provide you with personalized insights related to your goals. You will also receive feedback on your motivations and insights related to your blind spots to support your professional success. With a plan in place, you'll be on your way to achieving your goals.

The length of time it takes to become a finance manager depends on numerous factors. These include your education level, industry experience, and specializations. Having relevant work experience is also important. Let’s discuss the most important factors.

What higher education is required to become a finance manager?

To become a finance manager you usually need to have a four-year degree. The most common majors are finance, accounting, economics, or business administration³. Many aspiring finance managers have a Master's of Business Administration (MBA). The main benefit of completing an MBA is broadening your business knowledge. This will improve your chances of career progression in the finance industry. It’s also a great option if you want to become a company director or even a firm's chief financial officer (CEO) in the future.

Smaller organizations may only require their finance manager to have an associate degree in a relevant subject. For example, you could earn a diploma in a business-related field and then gain industry experience. Once you have some experience you could become a finance manager. There aren't many opportunities for people with only a high school diploma. Large organizations will insist you have an under or post-graduate qualification in finance. A degree in accounting is often the preferred qualification.

What licenses, certifications, and registrations are needed?

Finance managers and accountants can gain professional certifications in the financial management field. These include becoming a Chartered Public Accountant (CPA) or Chartered Financial Analyst (CFA). To receive these additional certifications you’re required to study for and pass, a set of exams. You can also join industry groups to receive continuous financial training. The main industry group in the United States is the Chartered Institute of Professional Financial Managers (CIPFM).

What on-job internships are typically undertaken?

There are many organizations of all sizes that offer internships. You first need to graduate with an undergraduate degree. During an internship, you'll gain practical financial management experience. You may work on your accounting skills or decision-making skills. The most common type of organization to complete an accounting internship at is a for-profit company. These companies include investment or banking firms. After the internship, you may receive a full-time job offer in a financial management role. Either way, you can use your experience to apply for other jobs.

What advancement or specialization opportunities are there?

You need professional experience to advance your finance manager career. When combined with your finance qualification you will find many opportunities for advancement. You can choose to specialize in one area of finance. For example, financial modeling, financial reporting, or investment management. You can also choose to work in a range of different organizations. These include consulting firms, risk management firms, insurance companies, and many others.

Financial managers can go on to become chief financial officers or finance directors. To achieve this, you first need to gain many years of experience. These roles involve taking on broader management of an organization's finances. Doing a postgraduate qualification such as an MBA will help you become a senior manager much faster.

Financial managers can work in many different industries in many different countries. This is due to the standardization of financial forecasting and reporting. Your skills as a finance manager are very versatile. Finance manager roles exist in many different types of organizations in both the private and public sectors. These include for-profit companies and non-profits. These can also include government departments and other public institutions such as schools and hospitals.

The most common career path for a finance manager involves several steps. The first is to attain a bachelor’s degree in business. You should major in finance, accounting, economics, or a related field. Gaining a degree usually takes between three and four years of full-time study. Once you graduate you can apply for entry-level jobs or internships. This will get you into the industry so you can gain valuable experience.

You may also be required to have passed a chartered accountancy course and be registered as a CPA or CFA. Gaining this extra qualification is useful. It will give you practical knowledge of the finance industry. Some people decide to do a post-graduate degree such as an MBA. This is very useful if you want to become a finance director or chief financial officer in the future.

During your finance career, you will receive many opportunities for advancement. You can choose various specialties such as asset management, budget forecasting, or financial tracking. You can usually move into more senior management roles once you have 10+ years of industry experience.

According to the U.S. Bureau of Labor Statistics, the median average salary of a finance manager in the United States is US$131,710⁵. Higher salaries can generally be found in larger companies. Lower than-average salaries are paid in government departments. Large cities such as New York City, Los Angeles, Chicago, and Houston have higher salaries. This is likely due to the number of businesses that have head offices in them.

On top of your annual wage, finance managers typically receive bonuses. These are for achieving financial targets during the financial year. When combined with a generous annual salary, it can become a very financially rewarding role.

Financial manager salaries are also influenced by years of experience. Starting salaries for entry-level finance managers are about US$80,000 per year⁶. The more senior your position and the higher your experience level, the higher your salary will rise during your career journey.

Some finance managers become part of the senior management team in roles such as chief financial officer. These roles can have salaries in the millions of dollars. The bigger the organization you help manage, the larger the salary. There are also many opportunities to help manage the finances of non-profits. This will give you experience managing finances without a focus on profit maximization.