Financial executive responsibilities can vary according to the position's specialization. Several different types of financial executive positions exist, including controllers, credit managers, bank managers, finance officers, asset and risk managers. One of the common threads between these specialties is the responsibility of analyzing a firm's financial transactions and leveraging its assets. Financial executives are typically responsible for preparing reports and developing strategies to benefit a firm's liquidity.
One of the most important financial executive responsibilities is the control of a firm's monetary resources. These resources may come in the form of credit, insurance, loans, deposits, investments, and cash. Managers dictate how the firm uses those resources, while monitoring the various financial transactions that have a direct impact on assets and liabilities. For example, a credit executive for a bank may determine the guidelines for loan application acceptance.
Various financial executive responsibilities deal with securing resources that the firm needs in order to continue operating. Most corporations do not simply rely on the influx of cash from sales. Non-profit organizations are completely dependent upon the ability of financial executives to secure outside funding. Some higher-level executives develop strategies for financing a company's growth, such as the decision to offer public stock.
Most executives are directly involved in preparing financial reports. This is one of the critical financial executive responsibilities. In some countries, a top level financial officer is personally responsible for certifying the accuracy of the information contained in these reports. Executives often assist with the creation of financial statements by analyzing information from the firm's accounting records.
Besides analyzing the information, financial executives must also be able to interpret and present it. Many financial statements, such as a company's annual report, do not just contain numbers. An annual report also includes statements from the company's executives about the driving factors behind those numbers. Many of those factors are directly related to the strategies developed by the managers.
Within the scope of financial executive responsibilities is the development and implementation of an overall direction. For example, a financial officer may advocate an organization's reduction of borrowing. This strategy may be short-term in nature and reactive. It could be done in response to a sharp increase in the company's amount of bad debts, defaults and write-offs.
Often, financial executives must constantly monitor the fiscal health of their organizations. Decisions to buy, sell, or liquidate property can stem from a corporate strategy, since financial managers often attempt to align monetary policies with the overall goals of the organization. For instance, for a company that specializes in lending to customers with risky credit profiles, it would not make much sense to rely on steady income from repayments. A financial executive with such an organization may need to develop a plan to back those loans, either through higher interest rates or a more aggressive outside funding plan.
