What In-House Finance Professionals Do
In a properly-structured organization, the in-house finance department will plan the distribution of assets and resources in analytical and strategic roles, in order to add value to the company, while those in accounting will oversee cashflow.
The reality of in-house finance is a little murkier, as even large companies like Google lump together the titles of Analyst, Accountant, Operations and Services, Auditor, and Compliance, all under the umbrella of one in-house finance team. This is fairly common, though the job duties are typically broken up fairly well based on areas of expertise. The same thing happens with smaller companies too, though the in-house finance team may be expected to cover more territory within each role. This means that, although in-house finance may be difficult to navigate while finding the right company and niche in a job search, there is a bounty of opportunity for anyone with a fiscal mindset and skills, as well as room to grow all the way through to executive roles like Finance Director or Chief Finance Officer (CFO).
Generally speaking, finance jobs can be broken into one of three divisions, each of which answers to the CFO.
Financial Planning and Analysis / Management Accounting: FP&A, which may also be called management accounting in some companies, involves making predictions about profit and loss. Individuals who work in this area gather data and make forecasts of all types, to help the executive team understand what’s to come based on a number of variables.
With this information in hand, the executive team is better poised to make data-driven financial decisions. FP&A may also be responsible for other aspects, such as setting budgets for departments or creating sales targets. An FP&A group often has a single manager who oversees it, senior analysts who cover a single product each, and a few junior analysts to support the senior analyst.
Controllership / Financial Accounting: The financial accounting branch of an in-house finance department is typically referred to as controllership. Those in this group are responsible for generating reports and making sure the books balance. They may also perform audits to make sure everything is in order. The head of this group is the controller, who will typically have accountants for each product or region working beneath him or her. As with FP&A, there are junior and senior analysts in this group too.
Treasury: The treasury branch oversees the flow of cash and makes predictions about the company’s financial needs. Those in treasury roles work with investors and banks to secure funding as needed, though things like commercial paper (unsecured short-term loans), credit lines, bonds, or raised equity.
It’s also up to the treasury team to make sure that working capital is used wisely, excess money isn’t being spent to source it, and that any surplus funds are put into short-term investments and not left idle. Within this group, there is a single treasurer heading up analysts, and each analyst will generally have a unique specialty, be it forecasting, bonds emission, to investing.
Who would enjoy a career in Finance?
Undeniably, most people who graduate with degrees from elite schools aim for banking careers due to the high salaries and prestige. However, going in-house for a company also comes with a lot of perks, namely normal workweeks which typically only consist of 40 hours in the office, as opposed to the 80+ banking analysts may do.
There also tends to be less competition and more camaraderie in-house, but some of this depends on the corporate culture of one’s chosen employer. At a basic level, in-house finance professionals must be skilled at mathematics, analytical, detail-oriented, and comfortable with technology. Having excellent communication skills and being self-directed are important traits as well.
With in-house finance being such a broad term, different skills will be needed to be effective in any of the three groups. For example, those in the FP&A group should be business-minded and have in-depth knowledge of all the factors which may impact the company’s profitability, ranging from vendor costs to labor, foreign currency exchange rates, and more.
While ethical behavior is important in any financial job, it’s even more so imperative for someone in the controllership branch, as a single misstep could compromise the company or result in legal trouble. Lastly, the treasury group covers many aspects of equity and debt. Understanding how each instrument works, as well as which methods are the most cost-effective/ productive way of managing funds, is imperative.
Who mightn't like the career?
While fewer hours are required, it does come at the cost of higher pay as opposed to banking jobs. Entry-level positions start 20-40% lower, and there aren’t massive bonuses. Six-figure salaries still exist, even at the analyst level, but it’s not like a banker’s salary. In other words, those who thrive in a money-driven environment won’t be happy with the salaries afforded by in-house finance positions.
There may also be pressure to misrepresent numbers or change how things are allocated. Those who are unprepared to insist upon ethical behavior, and who also know how to handle these delicate situations in a diplomatic way, won’t do well in the field. Lastly, some of the work can be repetitive, and there may be difficulty moving up the career ladder, particularly within smaller companies, so some may feel the desire to switch companies a few times until they find the right fit.
A bachelor’s degree in a business, mathematics, finance, or accounting-related field is generally the minimum requirement to get into the field. Licenses may be required to work in some jurisdictions, and belonging to a professional organization is beneficial, if not mandated. In these cases, accreditation through a body such as the American Institute of Certified Public Accountants (AICPA), Chartered Institute of Public Finance and Accountancy (CIPFA), Institute of Chartered Accountants in England and Wales (ICAEW), or Association of Chartered Certified Accountants (ACCA) is expected.
Many large companies offer finance internships for new graduates, which can make getting some experience prior to applying for permanent placement easier. It’s also helpful to learn as much about the company as possible prior to interviewing, as interviewers are known for asking questions specific to their organization or industry. Additional questions will vary based on one’s area of expertise, but typically include inquiries about dealing with issues each group faces and identifying personality traits.
- Preparing for an FP&A Interview
- FP&A Interview Questions
- Controller Interview Questions
- Preparing for a Treasury Analyst Interview
Moving into Finance from another career
Virtually any accounting or finance career can pave the way for an in-house finance career. Others may work their way into finance through administrative support roles within companies. Beyond this, it’s difficult to make the transition without obtaining a finance or accounting degree.
Role: There are often junior and senior analyst roles within each of the three main in-house finance branches. Analysts are typically tasked with gathering data, handling administrative tasks, compiling reports, and completing other tasks as requested by senior employees.
Role: The next step up from analyst is typically manager, controller, or treasurer. Each one heads up that particular branch and oversees the work of the analysts. In FP&A, the manager will be the one reporting findings and giving presentations to the CFO, and informing departments of their budgets and targets.
A controller will review reports for accuracy and will follow up with various departments when there’s a discrepancy. The controller will also work with the CFO to ensure the books are accurate, but may also restructure/ reallocate expenses as needed. The treasurer oversees all the analysts below him or her, makes sure working capital is being invested or borrowed wisely, and is the main contact for investors and banks.
Chief Financial Accountant (CFO)
Role: Those on the executive track will aim for the position of CFO. The CFO oversees the entire finance department and focuses on strategy. He or she will set goals and targets for the department, ensure best practices are implemented, and develop strategies to make the team more productive and efficient.
Analysts don’t typically travel for work, but depending on a company’s structure and how many offices it has, mid-level and upper-level in-house financial professionals may need to travel to meet with junior staff or executives.
Analyst: Data from PayScale indicates that base salaries for FP&A analysts average USD$62,000 in the United States, ₤39,000 in the United Kingdom, CAD$60,000 in Canada, and AU$85,000 in Australia. Those in the controllership branch will make roughly the same, while those in treasury may see a few thousand more per year due to the additional knowledge required.
FP&A Manager: USD$98,000, £61,000, CAD$95,000, and AU$125,000.
Financial Controller: USD$79,000, £48,000, CAD$77,000, and AU$103,000.
Treasurer: USD$78,000, £30,000, CAD$101,000, and AU$87,000.
Chief Financial Officer: USD$134,000, CAD$141,000, ₤113,000, AU$166,000.
Bonuses and profit sharing start out somewhat modest at the analyst level, usually amounting to only a few thousand dollars per year, but in the upper levels, they can increase pay by 10-20%. Treasurers tend to see bigger bonuses, and may have total take-home pay which exceeds one million a year.
Why In-House Finance Professionals move on
Most people who are unhappy in their positions simply change companies and stay on their current career track, as doing so can improve pay, break monotony, and provide opportunity to climb the career ladder when one is stalled. However, those who desire greater challenges or much higher salaries move into banking or consulting.