How much does a financial director make? (Salary and tips)
By Indeed Editorial Team
Published 6 July 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
A financial director is a senior executive who maintains the financial operations of a company or organisation. They develop budgets that help organisations achieve their long-term financial goals, such as increasing revenue or maximising their earning potential. Understanding what do directors of finance do and how much they earn can help you decide if you'd like to advance your career to this role. In this article, we answer, 'How much does a financial director make?', explain how you can increase your salary as a director of finance and show you what it's like to work as a financial director.
How much does a financial director make?
Learning the answer to, 'How much does a financial director make?' can help you develop realistic salary expectations about working as a senior-level finance executive. The national average salary of a financial director is £80,211 per year. Finance professionals interested in advancing to this role usually gain experience as finance managers first. The national average salary of a finance manager is £43,977 per year.
Related: 10 essential finance manager skills
Ways to increase salary as a financial director
If you're thinking about creating a career plan and working towards becoming a director of finance, there are various things you can take into consideration. For example, it's important that you take into consideration your salary expectations and if the average salary in this role can meet them. To increase your chances of earning more as a financial director, here are a few things you can do:
Developing niche skills
One of the best ways in which you can improve your earning potential in the finance industry is by developing niche skills. Although many finance standards apply to most industries, you may have a high chance of becoming a finance specialist if you focus on a specific industry. For example, corporate finance and how large corporations handle their finances during a crisis or when they want to enter a new market. By becoming an expert in a narrow field, you can enjoy a lucrative salary because more companies would want to use your expertise to better manage their finances.
A common way to increase your salary as a director of finance is to relocate. Most financial institutions, including banks and brokerage firms, have their headquarters in the capital, as this allows them to attract highly skilled professionals who already live there. Although the cost of relocating can be high, usually the benefits that you'd gain, such as a higher annual salary and better employee benefits, would exceed that cost.
Exploring different areas of finance
Working as a general financial director is a great opportunity that allows you to develop a wide range of skills before you choose one area of finance in which you'd specialise. This also gives you a chance to consider becoming an independent specialist and offer your services to clients instead of working full-time for one employer. Here are some of the most lucrative areas of finance to consider as an aspiring director of finance:
Difference between financial director vs. chief financial officer (CFO)
Although smaller companies may choose to use these names interchangeably, larger organisations usually differentiate these two roles. Typically, within those organisations, both financial directors and chief financial officers may handle senior-level financial responsibilities. The main difference is that the financial director usually acts as the company's chief accountant and the CFO is the most senior person within the finance department who's responsible for the strategic direction of the company's finances.
In other words, if you're interested in covering both the strategic and functional activities within an organisation, then you may consider working for a smaller organisation as a financial director. After gaining enough experience there, you can then apply for a CFO role at a different company. This can also help you improve your earning potential, as the national average salary of a chief financial officer is £121,579 per year.
Common responsibilities of a financial director
A financial director is a broad and interesting role that covers various activities that allow you to help a company achieve its organisational goals. Here's what financial directors are responsible for the following:
The primary responsibility and the main purpose of a financial director's job is to provide insightful financial advice to a company. They usually do this through developing policies, establishing internal processes and controlling the work of the finance and accounting teams. As a result, financial directors can control the entire company's finances and ensure it can meet its financial commitments.
As a financial director, you'd not only control but also manage and direct the finance staff. Financial directors are responsible for creating an environment in which their subordinates can easily perform their duties and help the company function according to important financial standards. To do that, it's helpful when directors know how to effectively motivate people within the organisation, for example, by offering them attractive growth opportunities or employee benefits.
Financial directors are also responsible for developing and controlling companies' budgets. Typically, there are at least a few things that they take into consideration for this. For example, it's crucial that they develop a budget that allows the company to make enough profit to cover its all expenses and debts. Through their work, senior financial executives make sure that the company meets its targets and complies with statutory regulations.
It's obligatory for every company to regularly prepare financial accounts and pay taxes. The financial director's responsibility is to oversee this process to make sure that these accounts are accurate for all departments within the organisation. During this process, financial directors may use their project management skills, as it's usually their responsibility to ensure the accounts are ready on time.
What it's like to work as a financial director
Most financial directors are full-time employees who work a nine to five job, Monday through Friday. Their employers may expect that they spend some extra time at work as the end of the tax year approaches, as they may have more work during that period. Although this is mostly an in-office position, it's not uncommon for directors of finance to travel for work, especially if the organisation has divisions in different cities or countries.
Financial director's career progression
Financial directors who've worked in this role for at least a few years may consider becoming independent professionals and offer their financial advisory or consulting services as freelancers. This way, they can work with multiple clients at the same time, making their work less routine. Because they usually have broad skill sets, they may even consider moving into general management. Doing this is usually possible for highly experienced directors and can help them earn more annually, as they'd be in control of how much they charge companies that use their expert services.
Key requirements for financial directors
Working towards becoming a financial director is a long-term process that requires you to gain expert knowledge of accounting and finance. If you're a senior-level professional who wants to know which of your existing qualities and skills to focus on to increase your chances of advancing to a director role, here are some things you can start with:
Extensive experience in the field: To become a successful financial director, it's necessary that you have extensive senior-level accountancy experience. Financial directors who've worked in finance for years usually have extensive knowledge of the industry and can easily navigate different responsibilities.
Ability to manage people: Managerial and leadership skills are essential for all senior-level executives, as they use them to oversee the work of different departments within the company. Continuously improving them can help you position yourself as a better-qualified candidate for a director of finance.
Strategic thinking: As a financial director, you'd be responsible for making sure that all departments of an organisation follow their budget plans and prepare accurate accounts and financial documentation. Thanks to strong strategic thinking skills, you can allocate money to them more effectively.
Communication and interpersonal skills: On a daily basis, financial directors work alongside the company's managers and leaders to provide them with valuable financial advice. Having strong interpersonal and communication skills helps directors be more approachable and help others within the organisation to achieve their financial objectives.
Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.
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