If you’ve got a nose for money and are interested in construction, a construction finance manager (CFM) position may be just what you’re looking for. The construction industry has some unique financial processes that make it different from other industries. Therefore, financial managers with construction experience are extremely valuable to the companies they work for.
Here we’re going to look at what a CFM is and what they do, their average salary, and the skills and qualifications you’d need for this position.
What is a construction finance manager?
A construction finance manager (CFM) is the company representative for financial matters. They monitor, report on, and make key decisions to ensure accurate financial statements for construction companies. They are often in charge of the accounting department if the company has one. Managers for smaller companies may also participate in the day-to-day accounting responsibilities.
Construction finance manager roles and responsibilities
Roles
- Advise and work with company management to meet financial goals
- Oversee accounting personnel and departments
- Work with banks, sureties, and CPA as the company representative
- Advise and work with management regarding legal and regulatory issues, and reporting requirements
Responsibilities
- Accurately track income and expenses
- Oversee vendor payments and payroll processing
- Prepare and review financial statements
- Monitor key performance indicators and financial trends
- Develop company budget
- Account and cost reconciliation
- Develop and maintain internal controls to ensure compliance
- Manage liquidity and cash flow
- Prevent theft and fraud
- Perform accounting closeout procedures on a monthly, quarterly, and yearly basis
The role of a finance manager in a construction company is to be in charge of accurately tracking income and expenses, monitoring budgets, reporting on the financial status of both projects and the company, and managing cash flow. It’s their responsibility to ensure that the company remains financially healthy and to work with management when making financial decisions.
The finance manager may also monitor and participate in accounts receivable collections to improve the financial health of the company and cash flow. This could include making decisions about sending customers to collections, or filing liens or bond claims.
Actual roles and responsibilities will vary depending on the size of the company and its departments. Finance managers may do more or less than listed above, depending on how the company defines its roles.
A construction finance manager reports to company management (CFO, CEO, or owner) and works with employees in the accounting department including credit managers, project managers, and other departments as needed. If a company doesn’t have a CFM, they may use an office manager, staff accountant, or accounting manager to fill this role. Companies may also hire a part-time or temporary CFO, called a fractional CFO, to help them with a temporary project, such as capital raising or an audit.
Construction finance managers perform similar duties to finance managers in other industries, but they have expertise in the construction industry and the nuances of accounting for project costs and percentage of completion.
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Required skills and qualifications
- Degree or certificate in accounting, finance, business administration, or related experience
- Accounting software-specific experience
- Supervision and employee relations
- Planning and problem solving
- Communication, both written and verbal
- Leadership
- Construction industry experience
- Attention to detail
Average salary of a CFM
The average salary for a construction finance manager in 2021 is $125,000-$135,000 — depending on your location. As a CFM is a member of a management team, their salary and responsibilities reflect that.
Is a construction finance manager the right position for you?
Being a construction finance manager requires both management and finance skills. Although not mandatory, experience using various construction accounting software packages is a benefit when looking for a job.
Finance managers also need leadership skills, good communication skills, and attention to detail. If these traits describe you, you may be ready for a budding career as a CFM.
Further reading – Cash Management in Construction: What Smart Financial Managers Know