Streamline Sales Opportunity Qualification for Accounting and Tax

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hey guys welcome back to the channel in this video we'll be unboxing the role of a financial analyst which means i'll be talking about the day in the life and things like the qualifications needed for the role and the kind of salary you can expect to have when you work as a financial analyst and if you've seen any of my prior videos you probably know by now that my background comes from public accounting where i started out at pricewaterhousecoopers and then after that i transitioned out to work in the private marketing of accounting and finance meaning working directly for a company rather than working for a public accounting firm and when i made that transition i first began as a financial analyst and so for the purpose of this video i'll be discussing the financial analysts role within the fpna function of a company and for those of you who don't know fp a stands for financial planning and analysis and before i go ahead and give you all the hard details on what you have to do on a daily basis as a financial analyst i want to discuss the salary expectations and i do this because i know you're all probably curious about the money and when you hear about the money then you can become more curious about the actual job responsibilities so let's talk about the money first so in the us and we are now in 2021 and looking at a market like new york city the average salary for a financial analyst with about two years of experience is about seventy thousand dollars a year and it's a big range and i've seen depending on the size of the company i've seen this anywhere between sixty thousand dollars all the way up to a hundred and twenty thousand dollars a year and as you get to the midpoint of your career say about seven years in you can expect to be making anywhere between 150 to 250 000 a year all right so let's begin with the day of the life day in the life of the financial analyst or the job responsibilities you can expect in this role as a financial analyst you can expect to be working in the following areas and we'll talk about each of these in detail here in a minute but you'll be creating an operating budget for the company that's one thing and then you'll be creating and maintaining a forecast model for the business and we'll talk about the difference between a budget and forecast model here in a minute but also you'll be providing an analysis of the actual results of the business compared to the budget beside this you'll be also working on investor presentations you will also be preparing that a room in the case of a fundraise or a merger and acquisition event all right so let's talk about the first item here which is creating an operating budget for the company in very simple terms this means creating a financial plan for the upcoming year which is basically saying looking in a crystal ball and predicting what revenues and expenses are going to be in the next year and in order for the financial analyst to create the cr the operating budget they need to be working very closely with the leadership of the company and it begins by creating a vision for the next five years for the company this is very similar to when someone asks you where do you want to be in five years so this is where the company decide where it wants to be in the next five years so the financial analyst would then look at this vision and work backwards and say okay if this is where we want to be in five years then here are the milestones that we need to hit in each of these five years and this is how you know he or she will begin to develop the budget for the upcoming year okay so as far as the budget this is the aspect of looking forward for the future years but budgeting process also includes looking backwards in the past so for example by looking at the prior year's rent expense the financial analyst can begin to create a picture of what expense is going to be in the next year so you see the budgeting process is a combination of looking forward and then looking backwards and that's how uh you decide what the optimal results should be for the upcoming year all right so this is about covers the budgeting process and if you want to learn more about how to create a budget i created a video specifically for this i'll leave a link to it up here you can go and check it out all right the second major responsibility for a financial analyst is maintaining a forecast model for the business and i know what you are thinking at this point you're probably asking uh what is the difference between creating a budget and a forecasting model and the answer is that both of them follow the same principle which is looking forward at the future what it will bring and then looking backwards at the past seeing what revenues or expenses the business had the difference is that a budget is static once you you lock it down it doesn't change while the forecasting model is dynamic this means that a budget is created and then it's locked down and you follow it in the upcoming year while a forecasting model is dynamic meaning it changes as a different inputs and different circumstances change in the business so for example if you sign up a really large customer this will not change the budget because the budget is already locked down for the upcoming year but it will change the forecasting model because now your revenue might be higher in the next 12 months and because all of the digging the financial analyst will have to do and the company's revenues and expenses they are in a very unique position to make recommendations to management on what they have to do in the business to make it more more profitable for example the financial analyst looks into the rent expense from prior year and how many employees are located at each office and you might notice that the headcount in one specific location has outgrown the co-working space that they rent from for example wework so it might be more profitable and cheaper to go and have a direct lease from a landlord rather than going with wework now because the financial analyst is the person who creates the budget they are in a great position to be able to compare such budget to the actual performance of the business so on a monthly basis the financial analyst will download the actual financial results meaning the balance sheet and the income statement and compare these results to the budget that they created at the beginning of the year and so this is another major responsibility of the financial analyst which is comparing the budget uh to the actual performance of the business and provide commentary on the variance and to give you an example if the budget was set to create to have a hundred thousand dollars expense for the month for software you know things like microsoft office or salesforce whatever uh software you're using but the actual results came in at 120 000 there is a 20 000 variance and uh the variance could be for example because the company hired more employees than have planned uh on hiring and so for each of these employees you require a seat with all of these software like microsoft and salesforce and and all of these tools so the investigations into these variances is really important because it can highlight any irregularities or mistakes for example if we are overspending because of an error and the invoice that we receive from the vendor it will be found here so comparing the actual financial results to the budget is really really important for the financial analyst and now the other major task for the financial analyst is creating investor presentations because as you can imagine investors of the business are really keen to know the results of the operations so the financial analyst will prepare slides usually in powerpoint or google slides highlighting the financial performance of the business okay so now that we talked about all of these tasks the other really big job responsibility for the financial analyst is the preparation of the financial information or as we call it data rooms in the case of a merger or we usually refer to these financial information or information as data rooms and the room here is a virtual room and not an actual real room what we basically is is a folder that lives on a computer or a network and in the folder we go ahead and save all of the financial information such as all of the uh just to the balance sheet the income statement and all of the projections for the revenues and expenses uh for the business now this covers the day in the life of the financial analyst but as far as the qualifications for the financial analysts you'll need to have a bachelor's degree uh at minimum in either uh business economics finance or accounting and i highly recommend that you and i can't stress this enough that you keep a gpa above 3.3 which is typically the gpa that i look for when i hire for a role to work in my team so beyond the bachelor degree if you really want to distinguish yourself from the rest of the candidates you want to have a masters in finance or a master's in business administration which is also referred to as an mba and the honest truth here is that for me as a hiring manager when i evaluate a few candidates for a financial analyst position i usually place a higher value on work experience more than i value a master's degree or an mba because real world experience is just the best in my view for the simple reason is that money real money is usually at stake in the real world compared to a school project for example where no real money is at stake so the kind of work experience that is relevant for a financial analyst position could be either work experience in an investment investment banking or equity research but also the relevant work experience could come from public accounting working in an auditing or an advisory advising company on merger and acquisition events business transformation etc and all of these projects all right this is everything i got today on the financial analyst position if you like this video go ahead and give it a big thumbs up and i'll see you in the next video [Music] you