In a company, the responsibilities and duties of a finance manager are quite crucial. One crucial task is overseeing the company's cash flow. In this regard, the finance manager must ensure smooth cash flow, both inflow and outflow.
Furthermore, the finance manager is also responsible for ensuring the company has sufficient liquidity to meet routine financial obligations, such as employee salaries, accounts payable, and other operational expenses.
Proper cash flow monitoring can minimize financial problems that hamper operations.
In managing cash flow, the finance manager will be assisted by several parties within the finance division who have specific roles in the company's finances.
To learn more about the duties of a finance manager, here is some information about the duties of a finance manager. Let's take a look!
Finance Manager Duties
In a company, the finance manager has quite complex responsibilities in monitoring the company's financial well-being. Here are some of the finance manager's duties that you should understand.
1. Analyzing Company Cash Flow
One of the finance manager's crucial duties is analyzing the company's cash flow. This analysis aims to ensure that incoming and outgoing funds are clearly sourced and directed to the right sources.
With clear analysis, the company will avoid financial risks that could endanger the company.
In analyzing cash flow, the finance manager must also monitor operational expenses, such as raw material purchases, salary payments, electricity bills, and so on, according to their proportions.
2. Observing Financial Trends
An equally important task of the finance manager is observing financial trends. In this case, the trend refers to the pattern or direction of financial performance movements over time.
This monitoring allows the company to compare financial data from each period to determine the company's current financial condition.
An increase in profit during this period represents a positive trend. Conversely, a decrease in revenue or profit is an example of a negative trend that requires more attention.
3. Creating a Financial Plan
A financial manager is also responsible for creating a company's financial plan. The financial plan must be based on accurate data that has been previously analyzed. This financial plan will then serve as a reference for the company's finances over a specified period.
In addition to serving as a target reference, this financial plan is also used in monthly reports to assess the extent of success. The financial plan contains several components, such as budgets, financial projections, debt management, and others.
4. Financial Risk Management
The finance manager's duties also include financial risk management. A financial manager must be able to identify and manage the financial risks faced by the company, such as fluctuations in exchange rates, interest rates, and credit risk. Furthermore, financial risk management also includes establishing financial mitigation strategies, such as the use of insurance.
5. Assisting in Company Decision-Making
The financial manager is responsible for making decisions within the company related to the management of the company's financial resources. These decisions will ultimately influence the company's target setting.
The types of decisions made include investment decisions, financing decisions, profit distribution decisions, cash inflow management decisions, and others.
6. Tax Management Planning
The finance manager is also responsible for the company's tax planning. Tax amounts are quite crucial in a company, so proper planning is necessary. The finance manager must ensure that all taxable income and expenses are correctly recorded and reported in accordance with applicable tax regulations.
7. Conducting Financial Performance Evaluations
The finance manager's duties also include evaluating the company's financial performance. Before submitting monthly reports to management, the finance manager must evaluate financial management for the period.
This evaluation includes monitoring target achievement, setting new targets, and evaluating progress.
Skills a Finance Manager Must Have
A finance manager, who holds crucial responsibilities within a company, must possess several skills to support their productivity as a finance manager. The following are the skills a finance manager must master.
1. Financial Analysis
A crucial skill for finance managers is financial analysis. The ability to analyze financial statements is crucial for preparing profit and loss statements, balance sheets, and cash flow statements, which aim to identify trends, problems, and opportunities.
2. Cash Flow Management
A finance manager must possess cash flow management skills. This ability ensures the company can meet short-term financial obligations without encountering liquidity issues, which could disrupt the continuity of operations.
3. Financial and Tax Preparation
Finance managers must have the skills to plan the company's long-term finances, including investments and resource utilization. Furthermore, finance managers must also understand applicable tax regulations to prepare tax reports in accordance with applicable regulations.
4. Investment Management
A finance manager must possess skills in investment management. In this regard, a finance manager must be able to assess various investment opportunities using appropriate analytical methods.
With the right methods, a finance manager can measure the success of an investment against the company's long-term plans. In addition to managing investments, a finance manager must also understand the risks of the investments involved to minimize potential losses.
5. Financial Risk Management
A finance manager must also possess skills in financial risk management. These skills can help a company identify, analyze, and manage risks that could impact its financial condition.
By possessing skills in risk management, a finance manager can minimize potential losses and protect the company from market fluctuations.
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