Financial accounting is a part of every type of business, whether large or small, and is necessary to run a successful, efficient company. Well executed financial practices can help companies save, earn, and flourish in unstable economic times. There are many different titles under the financial accounting umbrella, such as risk and insurance manager, cash manager, controller, manager of international banking, treasurer, credit manager, and managerial accountant. Each job has a specific role in financial accounting and is typically based in a bank, credit union, or a mortgage or savings and loan firm.
Risk and insurance managers specialize in international transactions and try to minimize risks that may arise when transacting finances through international companies. Also, managing international banking systems, managing the insurance budget, and investing in interest bearing instruments are some the risk and insurance manager's duties. Cash managers or cash accountants manage the business and investment needs of a company by determining if loans meet the cash requirements and manage the cash flow of receipts and disbursements. Controllers can manage financial departments, such as budgeting, accounting, and auditing departments. Their duties are to “predict” the financial forecast for a business by preparing accounting statements, analyzing future earnings, and preparing reports that adhere to financial laws. Treasurers are in charge of funds, investment management, cash management, and generating finances for a group, club, charity, or union.
Managerial accountants mainly work as a team with others and perform duties such as performance evaluation, asset management, cost accounting or cash accounting, and recording and analyzing information for upper management to utilize in making wise business decisions. Managerial accounting professionals can also prepare financial reports for stockholders and other groups for future investing. The Institute of Management Accountants offers the Certified Management Accountant, or CMA, designation. This can be obtained by receiving a minimum score on an exam and a bachelor's degree. The exam is in four parts and all parts must be passed, but not all at once. You also need a minimum of two years of accounting experience.
There is also another designation available called the Certified Government Financial Manager, or CGFM, given by the Association of Government Accountants, which is available for all managerial accountants at any level. This is a three-part exam and requires at least a bachelor's degree to be taken and at least two years experience in accounting.
While the world becomes larger as more businesses sprout up, it also becomes smaller through international trading. Companies will need those who are proficient in complex global financial transactions and managing mergers and acquisitions. Education for these professions will include a bachelor's degree for future advancement, with continuous training and seminars to keep up with new technologies and changes in financial laws. Acquiring a master's degree in some form of financial accounting will greatly improve your chances for advancement and promotion. Becoming a certified public accountant (CPA) or certified management accountant (CMA) licensed by a State Board of Accountancy will also be beneficial. Working with others is a vital part of the financial accounting business, and being able to communicate complex technical terms is a skill in itself.
With the expansion of growth, more international trading, and new companies forming, businesses will need financial accounting professionals. There are currently just over 500,000 in the financial accounting sector, and over the next decade expected growth could raise that number to nearly 600,000. Those who have master's degrees in accounting will find themselves with the best opportunities to find a job. Accounting scandals are also commonplace, and employers will need highly qualified professionals who are certified and have established codes of ethics. Competition will be fierce because the number of jobs is far lower than the number of applicants. The Sarbanes-Oxley Act of 2002 was taken into effect to limit account fraud. This act requires companies to maintain financial responsibility in their practices.
Depending on the specific job location (federal, state, or local), you will see that salaries will vary greatly in the financial accounting profession, from about $50,000 to $180,000. On average, the highest earning professionals were directors of finance earning between $79,000 and $184,000, with additional stock options benefits and maybe even the use of a company car.