Introduction
A financial manager is responsible for managing and overseeing the financial activities of a business or organization. They are in charge of planning, directing, and coordinating the financial operations of an organization, including budgeting, forecasting, accounting, and auditing. Financial managers play a critical role in any organization, and as such, they are well-compensated for their expertise. This article will explore how much does a finance manager make and examine factors that influence their compensation.
Analyzing Salary Data of Financial Managers
The Bureau of Labor Statistics (BLS) reports that the median annual wage for a financial manager was $129,890 in 2019. The lowest 10 percent earned less than $71,680, while the highest 10 percent earned more than $208,000.
Exploring the Average Income of a Financial Manager
The national average salary for a financial manager varies based on industry. According to Glassdoor, the average salary for a financial manager in the United States is $96,821. However, salaries can range from $73,948 to $118,715 depending on the industry.
National Average Salaries According to Industry
The following table provides an overview of the average salaries for financial managers by industry:
| Industry | Average Salary |
|---|---|
| Accounting and Finance | $99,637 |
| Banking and Insurance | $95,925 |
| Investment Management | $108,794 |
As the table illustrates, the highest earning financial managers are those in the investment management industry, followed by those in the accounting and finance industry and then banking and insurance.
Regional Variations in Salaries
Financial managers in some regions earn higher wages than those in other regions. According to PayScale, the top-paying states for financial managers in the United States are New York ($120,855), California ($118,068), Massachusetts ($116,801), Maryland ($115,741), and Virginia ($114,861).
Impacts of Experience on Financial Manager Pay
Experience is a key factor in determining a financial manager’s salary. According to research conducted by Robert Half, “the starting salary for experienced financial managers with five to nine years of experience is $107,500, while those with 10 to 19 years of experience command a median starting salary of $125,000. Those with 20 or more years of experience have a median starting salary of $142,750.”
Comparing Financial Manager Salaries Across Industries
The type of industry also affects a financial manager’s salary. Financial managers in certain industries earn higher salaries than those in others. Here is an overview of the average salaries for financial managers in three different industries.
Accounting and Finance
According to the BLS, the median annual wage for financial managers in the accounting and finance industry was $99,637 in 2019. The lowest 10 percent earned less than $56,410, while the highest 10 percent earned more than $181,170.
Banking and Insurance
The BLS also reports that the median annual wage for financial managers in the banking and insurance industry was $95,925 in 2019. The lowest 10 percent earned less than $54,520, while the highest 10 percent earned more than $179,400.
Investment Management
Finally, the BLS states that the median annual wage for financial managers in the investment management industry was $108,794 in 2019. The lowest 10 percent earned less than $60,110, while the highest 10 percent earned more than $206,880.
Examining the Impact of Experience on Financial Manager Pay
As mentioned earlier, experience plays a major role in determining a financial manager’s salary. Let’s take a closer look at the impacts of experience on financial manager pay.
Benefits of Experience
With experience comes greater responsibility and higher salaries. According to the BLS, “experienced financial managers generally report to top executives and are responsible for monitoring many aspects of a company’s finances. As a result, these professionals typically earn higher salaries.”
The Role of Education
In addition to experience, education can also impact a financial manager’s salary. Most employers prefer to hire candidates who have a bachelor’s degree in finance, accounting, economics, or a related field. According to the BLS, “financial managers with master’s degrees, especially in business administration or finance, may receive higher salaries and have better prospects for advancement.”
Investigating Factors that Influence Financial Manager Compensation
There are several factors that can influence a financial manager’s compensation. Let’s take a closer look at some of these factors.
Company Size
The size of a company can significantly affect a financial manager’s salary. According to PayScale, financial managers employed by large companies tend to earn higher salaries than those employed by small companies. For example, financial managers at companies with 1,001 to 5,000 employees have an average salary of $111,569, while those at companies with 500 or fewer employees have an average salary of $91,973.
Geographic Location
The geographic location of a company can also play a role in determining a financial manager’s salary. According to Robert Half, “salaries for financial managers vary widely across the country, with those in larger cities and areas with a higher cost of living often earning more than their counterparts in smaller towns.”
Job Title
The job title of a financial manager can also affect their salary. For instance, according to PayScale, the average salary for a senior financial analyst is $76,590, while the average salary for a financial controller is $99,620. Senior financial managers earn even more, with an average salary of $120,086.
Conclusion
In conclusion, a financial manager can expect to earn an average salary of $96,821. However, this amount can vary greatly depending on industry, experience, education, job title, company size, and geographic location. Experienced financial managers with advanced degrees and managerial positions typically earn higher salaries than those without. Additionally, financial managers working for larger companies or in high-cost regions tend to earn higher salaries than those working for smaller companies or in lower-cost regions.
Summary of Findings
To summarize, the national average salary for a financial manager is $96,821. Factors that influence financial manager compensation include industry, experience, education, job title, company size, and geographic location. Financial managers in the investment management industry earn the highest salaries, while those in the banking and insurance industry earn the lowest. Additionally, financial managers with experience, advanced degrees, and managerial positions typically earn higher salaries than those without.
Final Thoughts
Financial managers play a critical role in any organization, and as such, they are well-compensated for their expertise. With the right experience, education, and job title, financial managers can expect to earn a comfortable salary. It is important to consider all of the factors that influence financial manager compensation when evaluating job offers and negotiating salaries.
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