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What Are the Different Responsibilities of a Financial Manager?

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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 02 November 2016
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The exact responsibilities of a financial manager depends on his or her appointment within an organization. Financial managers may be credit managers, risk managers, treasurers, cash managers, risk managers or controllers. Organizations hire financial managers to help manage the inflow and outflow of funds within the organization, increase profitability, and mitigate risks. They help their organizations prepare financial reports and also assist in the planning and implementation of strategies aimed at cash management.

Some of the responsibilities of a financial manager include organizing and keeping a record of the way money is disbursed and received within the organization. Whenever the organization has a financial commitment, it is the financial manger that will disburse the requisite funds to meet such an obligation. Financial mangers also prepare cash flow projections, which enable them decide if the firm has enough liquid cash to meet its responsibilities or if it may be necessary for the firm to obtain a loan from a financial institution to meet the needs. If the financial manager discovers a surplus of cash based on projections, he or she will determine the best way to utilize the excess funds. This may be through investments or through further expansion.

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Other responsibilities of a financial manager include the use of financial techniques like hedging to substantially reduce the level of risk a company might be exposed to during business operations. He or she may also study the types of risks inherent in the transaction with the aim of deciding whether to obtain insurance to protect the company against such a projected loss. Financial managers also make provisions for the protection of the company’s assets and reputation against risks like environmental damage to the buildings, damage to the equipment, and any act of sabotage on the part of any employee.

More responsibilities of a financial manager include the maintenance of a cordial relationship with other external entities connected with the organization’s finance. Such people include attorneys, bankers, tax authorities and auditors. Financial managers also manage the budget of their companies and keep up with the trends in the market, including any changes in legislation that may affect the company's finances. They undertake the study of the competition with the aim of developing strategies to keep their own organizations ahead of the competition. Financial managers implement techniques to ensure that past-due or delinquent accounts are collected from their customers. This will help keep the firm solvent and also increase the inflow of cash.

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