We all use money and manage our personal finances, but what does it mean to study finance in a business context? Corporate finance encompasses the process of acquiring needed funding as well as how that funding is managed and allocated within an organization.
In terms of day to day operations, that means knowing proper accounting and bookkeeping practices to accurately track cash flows in and out of different business areas, and managing the company balance sheet to ensure the lights stay on. In the bigger picture, finance expertise is critical for planning any business funding strategy, regardless of the mix of cash, debt, and equity investors and equity sources like venture capital, private equity, or even an IPO.
While money may be the ultimate fungible commodity, careers in finance aren’t as interchangeable as some people think! Traditional jobs in finance include accountants and certified public accountants (CPAs), controllers, actuaries, bankers, and financial planners, and these services are always in demand. Higher up the ladder, most large corporations have a chief financial officer (CFO) in the C-suite.
Just as the world of finance is evolving, so are fast-growing careers in this field. For example, environmental accountants provide guidance at the intersection of the environment and business, with responsibilities such as determining compliance costs for regulations and identifying cost-saving environmental initiatives. Forensic accountants are the detectives of the financial world, with responsibility for “following the money” in cases of corporate fraud, corruption, organized crime, and increasingly complex financial crimes.
Regardless of what type of career you want to pursue, investing in your education can help you get there.
People who can read and interpret financial data and risk trends are best suited for roles in finance. Strong math and analytical thinking skills are also useful for a career in finance. It’s important to have an interest and understanding of both micro and macroeconomics and to understand the connection everyday humans earning and spending money have to global financial institutions. People best suited for roles in finance should have an interest in current events and economic policy around the world as those factors influence financial institutions here and abroad.
One of the most common career paths for someone in finance is working as an accountant. Accountants are responsible for presenting financial data to colleagues and clients. Financial planners may work with individuals or estates to manage and plan financial portfolios. Financial analysts build models to assist bankers, corporations, and investors on stock offerings and future projections. Another common career path for someone in finance involves working as a budget analyst for a corporation, government entity, educational facility, or nonprofit organization.
Topics that examine financial markets may explain behavioral finance and economics. For a broader picture, learners may consider studying global financial markets and risk management. Topics related to analysis may cover quantitative modeling and explore financial modeling, linear regression, and corporate finance. Investment and portfolio management will help learners understand how to manage risk and meet financial objectives. Learners interested in sharpening their knowledge of economics may want to consider topics that center on markets and allocation. For a more detailed picture, check out topics that discuss game theory, competition, and monopoly markets. What types of places hire people with a background in finance?
Financial institutions like banks, investment firms, accounting firms, and credit unions hire people with a background in finance to manage capital, make projections, and perform detailed analyses. Insurance companies hire people with a background in finance to assess risk and manage policies for individuals and businesses. Mortgage companies hire mortgage brokers to investigate risk and issue mortgages to qualified candidates.