Corporate Finance For Dummies. Michael Taillard

you need to know about the Treasury is that it’s where your government bonds and risk-free investments come from and it’s where your payments come from if you own government investments or do any contracting work for the federal government, as many corporations do.

Getting a Job in Finance Land

      As with most places in the world, your visit to Finance Land will be a short one unless you can find work. The following sections outline some roles to consider in this land of other peoples’ money.

      Accounts payable and/or receivable

      Accounts payable specialist and accounts receivable specialist sound like they should be similar roles. In terms of the basic paperwork and function, they are quite alike. An accounts payable specialist manages paying bills that are due, while the accounts receivable specialist collects money that is owed. The real significant difference is that paying bills is a lot easier than collecting money from people who owe, so accounts receivable quickly turns into a role of debt collection. It's not a bad entry-level position to get started in the finance, though.

      HR and payroll

      This role is very much the liaison between Finance Land and the employees of a company who generally haven't specialized in finance. Paychecks and benefits and retirement accounts and insurance stuff and time off — they are all handled here. This role has a greater customer service feel to it, so it helps to be a “people person,” as they say.

      Analysts

      Analysts have the best job in the financial world, as far as I’m concerned. These people get to do a whole lot of research and analysis to derive useful information from data or otherwise yet unstudied scenarios. Normally, analysts receive budget information or corporate financial information and are told to do the calculations necessary to make recommendations. Often these projects are fairly broad, and analysts have to model new forms of calculations, assess market trends, and make other similar efforts that require a degree of creativity and innovation.

      Auditors

      As you’re typing on the computer, if you spell a word incorrectly, spell-check will likely correct you. Auditors are kind of like the spell-checkers for corporate finance. They go back and check the work of all the other financial professionals, making sure everything is accurate, correct, and done properly. They’re also usually the ones who discover cases of fraud or embezzlement. A special type of auditing, wherein auditors do their calculations for the purpose of presenting them in court, is called forensic accounting.

      Adjusters

      Adjusters are people who work for insurance companies and analyze your insurance claim to determine how much the insurance company will pay for damages and whether your claim is fraudulent or real. Any claim large enough for a corporation to file is guaranteed to attract an adjustor inspection.

      Bookkeepers and accountants

      “Bean counters” is the phrase used to refer to this role which, although one of the most vital in Finance Land, can be just as boring as it sounds. In this role, you keep track of the movement of all money, make records, file reports, and make sure everyone on the planet knows exactly what has happened with the money you are keeping track of.

Get a degree in accounting and then pursue your CPA to become a rock star in this field.

      Modelers and scientists

      These folks take the data collected by accountants and others and run all kinds of quantitative analysis on it to turn that data into useful information. If you like math, statistics, and computer coding, this is a very lucrative field to pursue.

      Economists and consultants

      Finance is only one subdiscipline of economics. Economists, as a result, do similar work to financial analysts but on a much broader scale that encompass more than money-related items. Consultants, too, are experienced experts, either directly in the field of finance or some field that complements finance. In both cases, they provide clarity, information, and guidance necessary for the proper application of financial management. The focus on these people isn't so much about money itself, but the resources that the money represents.

      Traders

      The term trader refers to anyone who makes a living by buying and selling investments with great frequency. Unlike investors, who purchase investments with the intention of holding onto them for an extended period of time with the expectation that they’ll rise in value, traders hold onto investments just long enough for them to rise in value a little bit and then sell them at a profit. Really, any schmuck can try to be a trader; some will succeed and others will fail. The only requirement is that you have some starting capital (in other words, money).

      

Work on getting your Series 7 license and perfecting your networking skills to make it as a professional trader of any kind.

      Treasurers

      Treasurers are the people in charge of managing financial assets. In other words, they’re responsible for keeping track of cash management, foreign exchange, pension management, and capital structure. Don’t worry; I discuss all these topics in much greater detail throughout the book. Often treasurers are also in charge of risk management, although this responsibility is sometimes given a separate position, depending on the company. (See Part 4 for more on risk management.)

      Bankers and more

      The nature of banking depends entirely on the type of banking a person does, but there are similar functions between them. Personal and commercial bankers handle the logistics of executing transactions for deposits, loans, some kinds of investments, some kinds of valuations, and so on. An investment banker deals with the logistics of assessing the value of a corporation, making sure the corporation gets paid for its shares, and selling those shares to private investors. Tellers work in banks and simply handle the counting and movement of money between people and/or accounts. Banking, as a whole, is really nothing more than managing basic money needs for others.

      

“Financial advisors” are not financial experts, despite the word “finance” in the title. It is their role to sell financial products and services, and they earn more money as you make more transactions. There have been attempts to pass a fiduciary rule that would require financial advisors to act in the best interest of their clients, but these attempts have been reversed.

Visiting the Finance Land Information Center

      Are you still feeling lost in Finance Land? Have you read this book (and all the other books written by yours truly) and are still feeling like a 2-year-old lost in the mall? Fortunately, you can go to plenty of other places for additional information. But be careful, because Finance Land is filled with people who give terrible advice. Think of this portion of the book as your guide map: It helps point you in the right direction for more exploration.

      Internet sources

      The Internet, with its seemingly unlimited ability to provide free, reliable information, has become a great resource tool for