Financial Project Manager-Are You One?

November 9, 2010

What is a Financial Project Manager?

You may know Financial Project Managers as a finance director, controller, or business analyst of a company. A Financial Project Manager may wear many hats within a company. By definition, a Financial Project Manager is someone who oversees projects for companies and corporations that have an impact on the company’s revenues (1).

How do Financial Project Managers impact company revenues?

A Financial Project Manager works directly with the cost structuring of the company as a whole;and works to reduce companywide financial risk. With that being said, a Financial Project Manager can impact a company greatly. Below are some of the formulas a Financial Project Manager will analyze before considering any project (4):

  • Net Present Value
  • Return on Investment (what value can these projects add?)
  • Break Even Point
  • Sunk and Opportunity Costs

Financial Project Managers are not only responsible for reviewing budgets, costs and benefits, but also have to invest time to create an accurate forecasting method for all stakeholders to understand (3). If the Financial Project Manager cannot communicate his/her accounting methods to the company’s stakeholders efficiently, then the company itself will be at high risk.

How does a Financial Project Manger differ from a typical Project Manger?

A typical Project Manager and a Financial Project Manager share the same critical goal, which is to complete a project with success. The main separation of a Financial Project Manager and another Project Manager within a company is scope size. Financial Project Managers may work closely with department’s short-term projects, but also have to project financial forecasting throughout the company’s long-term projects. For example, projecting future forecasting analyst is one main difference between a Financial Project Manager and a typical Project Manager. Financial Project Managers have to take into consideration forecasting numbers for all departments within that company or corporation. Financial Project Managers are considered long-term project managers, as opposed to short-term project managers.

Typically, when I hear about Project Managers I think construction development or software development.

Most projects are short-term (less than one year). A project, by project management definition, consists of a temporary endeavor undertaken to create a unique product, service, or result (2). However, for any business to be successful there has to be long-term financial developments. Financial Project Managers develop long term financial policies and procedures before business projects are started. The policies and procedures are then set in place before the projects go live, and then are adjusted accordingly.

What is the role of a Financial Project Manager?

Financial Project Managers typically plan and develop cash management strategies and direct investment activities within the company (1). As with any project manager, Financial Project Managers work closely with the "C" level employees to ensure long-term success. A Financial Project Manager is generally the go-to person when financial affairs need to be adjusted to handle the current internal/external environment. The points below are core examples of what Financial Project Managers responsibilities may look like during projects:

  • play a key role within the company, ensuring a profitable future for the company
  • regulate organization’s budget, calculating capital gains, risk and investment funds
  • have extensive understanding of the financial forecasting process, and how the forecast impacts other areas of the company

How can I become a Financial Project Manager?

Do you have a personal monthly budget? Have you ever had to adjust financially when your residual income increases or decreases? Are you constantly using cost saving practices for your bank account? Well, if you answered yes-then you are a Financial Project Manager. Now this is a type of project management that does not create wealth like a job would because it is a personal project, so it does not have an immediate effect on generating revenue. These common accounting principles are what most Financial Project Managers practice on a regular basis, just a little more complicated. A vast majority of Financial Project Managers will have a bachelor’s degree in Finance or Accounting. Furthermore, a master’s degree such as a MBA, MAc or MEng and/or certification (PMP, CFA, CPA, CMA, CTP) is required to even be considered for a Project Manager position. Any great Financial Project Manager will have an extensive background of education and experience managing projects.

by William Chase Wright

References:

1. http://www.wisegeek.com/what-is-a-financial-project-manager.htm

2. http://en.wikipedia.org/wiki/Project

3. http://ezinearticles.com/?Project-Financial-Management—10-Key-Steps-to-Streamline-Your-Business&id=2063404

4. http://www.builderau.com.au/strategy/projectmanagement/soa/How-financial-analysis-can-impact-project-initiation/0,339028292,339178420,00.htm

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