Every company, whether it is a small bakery or multinational corporation, needs money to operate. Entrepreneurs have to raise capital to manage inventory, supplies, equipment, employees’ wages, and office space. In other words, having sufficient business finances is critical to the success of every company. However, the job doesn’t end after bringing capital into the business.
Enterprises are looking for professionals who can help with financial management. They need people who can restructure finances, reallocate costs, and bring new investment opportunities into the business. Also, with persistent growth in FinTech, the demand for tech-savvy finance experts is rising.
Thus, conventional bookkeeping skills won’t help you thrive at your job. Here we are listing five skills you need to accelerate your career in the financial sector.
1. Number Crunching Skills
Any financial analyst employs the use of statistics and equations in understanding financial data. It comes as no surprise that mathematical skills are highly crucial for anyone willing to be a part of this field. From calculating taxes, making financial statements to estimating growth ratios – understanding numbers is crucial. If you don’t have much experience in actuarial work, learn the ropes. You can complete an online master of accounting to expand your knowledge related to the art of crunching numbers.
You would learn how to combine contextual information with statistics to give companies a clear picture of their finances. Similarly, you will understand how to work with numerical and graphical data, draw conclusions, and implement findings. It will further prepare you to make accurate financial projections and can improve recruitment chances.
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2. Understanding Time & Risk
Usually, every company considers two elements while making decisions – time and risk. Entrepreneurs want to measure their risk exposure and time maturity before seeking loans or investing money. Hence, a financial analyst should know how to deal with the economics of risk and time. You have to calculate the risk and rewards of every decision to ensure that the company is heading in the correct direction.
Similarly, you have to understand the time value of money because companies prefer to have consistent cash flows in the present and future. You can calculate the actual value of your company’s investments to determine how much it will be worth in the next ten years. In case its value is lower than that of today, find investment options that offer real-time returns. Your keen understanding of risks and time will help companies make informed decisions, reducing the likelihood of losses.
3. Market Awareness
Anyone working in the finance sector has to stay up to date with emerging market trends. Whenever you hear the latest financial and business news, you should know how it can affect your company. For instance, if the dollars are declining against euros, the imported raw material will likely become expensive. As an intelligent finance professional, you will hedge against the exchange rate beforehand to avoid increases in raw material costs.
Besides this, if you come across the news of the government printing money, understand its impact on the economy. Perhaps, with more money, the demand will increase, leading to inflation. Therefore, you can adjust the price levels beforehand and save the company from any potential downfalls. Also, look out for possible fluctuations in interest rates to facilitate the company’s financing decisions.
4. Analytical Skills
Nowadays, many firms lookout for graduates who can effectively deal with available information and convert data into actionable insights. Here, analytical skills come into play. You should know how to interpret data from financial statements and draw relevant conclusions. Similarly, you must have an eye for detail to recognize the underlying problems in finances. If gross profit is 60%, but net profit is only 8%, you must analyze the business expenses.
You can look for overhead costs or fixed expenses that consume a significant amount of profits. You have to gather this data and present it to business executives to adopt cost-cutting measures. Additionally, you have to apply these skills in different business situations to help companies make the right decision.
One thing pandemic has taught us is that we have to prepare for the unexpected and adapt quickly. The same goes for modern-day finance students. You have to be adaptable and agile to respond to changing patterns and trends in the finance world. Lately, FinTech has become one of the biggest trends, giving access to automated accounting software. Instead of sticking to manual calculations, you have to integrate FinTech tools. In addition to reducing the workload, it eliminates errors in calculations, ensuring accuracy.
Moreover, many giant companies look for sustainable investment opportunities to play their role in reducing environmental damage. It means finance experts should be well-acquainted with green companies and their dividend payout ratios. After all, you have to ensure the company doesn’t invest in a loss-procuring enterprise for the stake of sustainable investment.
The finance sector is consistently evolving. Companies are deploying high-tech tools, software, and risk management systems to overcome economic uncertainties. Likewise, they look for a competent financial analyst who can manage finances and foster growth. Therefore, people thinking to accelerate their career in finance must expand their skillet. You can brush up on your analytical and number crunching skills or up-skill your knowledge related to FinTech.