Role of Finance Officer: Know Their Top 10 Skills and Responsibilities

The role of finance officer in India is constantly evolving. According to Michael Page’s India Talent Trends 2023 The Invisible Revolution report, the finance and banking sector is focusing on hiring professionals with experience in economic, social, and corporate governance, sustainability, and succession planning. Moreover, the demand for financial officers who can handle investor relations has also been increasing, with more and more Indian companies aiming to ‘go public’ with their IPO (Initial Public Offering).

In this blog, we’ll discuss the following topics:

• What are the Core Responsibilities of a Finance Officer?
• How Does a Finance Officer Contribute to Organizational Financial Planning and Forecasting?
• What Skills and Qualifications are Required to Become a Successful Finance Officer?
• How Does a Finance Officer Collaborate With Other Departments Within an Organization?
• What are the Challenges Faced by Finance Officers in Managing Financial Operations?
• Finance Manager Career Outlook and Salary

What are the Core Responsibilities in the Role of  Finance Officer?

To begin with, the role of finance officer involves overseeing the financial activities of the organization and helping the organization achieve its financial goals. Therefore, the key finance officer responsibilities included in a finance officer job description are:

• Prepare and execute various plans to ensure the organization’s financial health and manage its capital structure
• Prepare financial reports, including balance sheets and income statements, and monitor cash flow and expenditure
• Analyze financial data to find patterns or trends and undertake financial activities accordingly
• Prepare and execute investment strategies to achieve the financial goals of the organization
• Work on financial planning, budgeting, and forecasting
• Assess the financial risks of the organization and suggest appropriate measures to mitigate risks
• Develop financial policies for the organization to optimize cash flow and boost operational efficiency
• Monitor business performance using various finance tracking tools
• Lead the finance team and manage financial IT activities and best practices
• Ensure compliance with applicable financial laws

How Does a Finance Officer Contribute to Organizational Financial Planning and Forecasting?

The role of a finance officer involves performing in-depth market research and historical data analysis to find patterns that forecast the organization’s cash flow. They leverage data to allocate budgets for each operation and ensure that it aligns with overall business objectives. In addition to the above, they also develop and implement financial models to evaluate future expenses and revenue.

ALSO READ: Unlock the Future Scope and Importance of Financial Management In 2023

What Skills and Qualifications are Required to Become a Successful Finance Officer?

Here’s a list of the key finance officer skills and finance officer qualifications that lead to a successful finance officer career path:

1. Financial Accounting

Familiarity with international accounting standards, bookkeeping, conducting internal audits, and know-how of accounting software (Oracle, Xero, etc.).

2. Financial Management

Involves planning, directing, and organizing financial transactions of a company.

3. Compliance

Knowledge of company-related laws from a financial perspective.

4. Financial Data Analysis

Determine the financial performance of the company using various tools and frameworks.

5. Cash Flow Management

This entails monitoring the cash inflow and outflow to ensure liquidity and forecast future requirements.

6. Tax Planning

Leverage tax exemption policies to reduce tax liabilities.

7. Tax Reporting

Ensure effective tax documentation and filing by reporting income, expenses, and other financial records.

8. Reconciliation

Verify that financial records and accounting figures align and are without any errors.

9. Budgeting

Knowledge of various budgeting practices and tools.

10. Financial Risk Assessment

Involves assessing liquidity, credit, market, and operational risks.

The most common finance officer qualifications are Certified Public Accountant (CPA), Chartered Financial Analyst (CFA), and  Certified Management Accountant (CMA). In addition to this, they also need to have at least five years of experience as a finance manager in an organization. Most organizations ask for a master’s degree in finance for the role of finance officer.

ALSO READ: Top 10 Finance Skills To Keep You Updated In 2023

How Does a Finance Officer Collaborate With Other Departments Within an Organization?

• The role of finance officer involves engaging with various departments within a company to advise, support, and educate team managers about the best financial policies and practices.
• Furthermore, the finance officer job description also involves collaborating with different departments for planning, budgeting, and forecasting.
• Apart from the above, a finance officer’s responsibilities also involve working with human resource managers to set up budgets for hiring and approval of travel transactions and staff encumbrances.

What are the Challenges Faced by Finance Officers in Managing Financial Operations?

1. Use of Technology

To begin with, the increasing use of fintech is impacting the role of finance officer as most of them are not technologically inclined. Finance officers, therefore, find it difficult to adapt to fintech tools and integrate them into financial processes. Since there is a learning curve associated with new technologies, they are also afraid that it might impact their day-to-day activities.

2. Lack of Effective Communication

Moreover, these officers must ensure all stakeholders—investors, team leaders, shareholders, and board members—align with various financial plans and policies. However, effective communication remains a critical challenge due to differing perspectives among the stakeholders.

3. Collaboration and Communication Gap

The finance department is often not informed of contracts with third parties or other financial obligations. As a result, budgeting and planning takes a hit.

Finance Manager Career Outlook and Salary

The three in-demand roles of a finance officer are financial controller, business finance manager, and head of internal audit. Moreover, the top industries hiring for this role include FMCG, digital, and clean energy.

The average annual salary of a finance manager with 3-5 years of experience is ₹22,00,000. However, finance managers with a Post Qualification Experience (PQE)  of 5-10 years earn an average annual salary of ₹32,00,000.

Again, professionals with experience of 10-15 years have an average annual salary of ₹38,00,000. Moreover, those with over 15 years of experience earn ₹45,00,000 on average.

ALSO READ: Who is a Financial Manager? Salary, Skills & Career

How to Become a Finance Manager With Emeritus

To conclude, these figures show that a finance manager is one of the highest-paying career roles in India. It is, however, a highly competitive field.  You need to constantly upskill yourself and stay updated with the latest financial trends to gain a competitive edge. Emeritus’ online finance courses can help professionals understand the role of a finance officer. Moreover, it aids one in achieving a successful finance officer career path. Explore Emeritus’ online finance courses and advance your career today!

By Sneha Chugh

Write to us at content@emeritus.org