5 Financial Skills Used by Finance Professionals Every Day
Financial professionals often boast an array of critical mathematical, accounting, and analysis strengths. Thanks to advancing technologies and the wealth of financial data constantly generated online, financial professionals also have to supplement their traditional financing skills with digital technical abilities, as well. In order to stay sharp and effective in finance, the following five financial skills can give professionals a competitive edge.
Budgeting is one of the most essential skills finance professionals need in their repertoire for running a successful business. A finance professional with the responsibility of managing and investing other people’s money must know how to manage the resources of their own organization as well. They need to be able to assess current financial resources in order to determine the most effective way they can be used to reach established goals in the next fiscal year. There may be additional resources to acquire and an astute financial professional will notice this. Creating budgets is necessary to get the approval and support of senior management, stakeholders and investors. While projecting and defining budgets, smart finance professionals will be able to assess the efficiency of financial resources and know when necessary changes need to be made. Factors that should be accounted for when preparing a budget include estimating sales and production volumes and employee salaries, benefits and other costs.
Another tool used by finance professionals to predict a company’s financial status is forecasting. This skill is comparable to budgeting, though there is a key difference. Whereas budgeting is necessary for planning the use of a company’s finances, forecasting facilitates the evaluation of the current budget plan as a means for determining whether or not the company is heading in the right direction. Finance professionals utilize forecasting to see if they will miss, meet or exceed their expected goals based on the established budget, allowing them to more effectively set goals in the future. Another use of forecasting by finance professionals is identifying financial trends using digital tools and platforms that show a clear picture of where the company stands in the market.
Finance professionals are called upon every day for investment advice., Professionals both in the private and public sectors need to communicate the research supporting the financial advice they are giving. This is why they need an in-depth understanding of financial statements and reports, how to gather and analyze financial data effectively, what key information these reports present, and how they can be used internally and externally to make financial decisions. Because these reports usually contain specific financial information that may not be easy to understand for clients and other professionals outside of the financial sector, it is important for finance professionals to have strong verbal and written communication skills to clearly relay the information.
Understanding the basics of accounting benefits finance professionals in a number of ways. The level of familiarity with accounting principles will vary based on a professional’s responsibilities and duties, however there are essential concepts that will come into play. Managers and controllers need a strong grasp of accounting math and applicable fiscal regulations in order to handle, prepare, and explain budgets to senior management and investors. For instance, being well-versed in the differences and intricacies of cash and accrual accounting is critical for many financial managers. The differences between these two accounting methods are important when determining cash flow management techniques, spending levels, outstanding receivables from clients and obligations to vendors.
Since finance professionals are responsible for making daily decisions regarding the best investment opportunities for their clients, they need to remain current on the role of data and rapidly changing technology. Building skills in data analysis can create many career opportunities as the value of big data becomes more ingrained in the daily operations of professionals in the finance sector. In order to capitalize on the goldmine of available data, finance professionals should know how to turn data analytics into useful business and investment intelligence. Some of the areas in which data analysis can play a significant role include data trend identification, process improvement, forecasting, data mining and extraction, operational analysis and strategic thinking.
Graduates with a master of financial economics benefit from having a detailed repertoire of finance skills when beginning their careers. The training and concepts they have learned will translate into the valuable knowledge they will utilize daily as finance professionals. Capitalizing on these strengths and evolving with new technology and industry trends will help them succeed throughout their professional careers.
Today’s employers seek finance professionals who understand the links between the economy and financial markets; professionals who are adept at forecasting potential impacts and timing investments for maximum return. This is the level of expertise you can acquire with the Ohio University online Master of Financial Economics.