7 SMART Financial Manager Goals (With Steps and Details)

Updated March 13, 2023

Financial managers are professionals who oversee client accounts and provide planning services for those who might benefit from procedural improvements, such as the SMART method. Short for specific, measurable, achievable, relevant, and time-based, this method of goal-setting can help enable financial managers to organize and plan efficiently. If you're a financial manager or aspiring to become one, the SMART approach is a valuable technique to learn for improving your work. In this article, we define SMART financial manager goals, explore seven different goals, and discuss their respective components.

What are SMART financial manager goals?

SMART financial manager goals are objectives that you establish using the SMART metric. There are various ways to set targets, each with different benefits. The SMART technique uses a realistic, time-sensitive approach to create a pragmatic rubric for management. Its components are:

  • Specific: This refers to setting a clear, precise objective by defining the goal in exact terms.

  • Measurable: This represents the metric that indicates progress while pursuing the goal, where milestones help improve morale and provide proof of the goal's concept.

  • Achievable: This means that the goal's practicality relates directly to its success because the requisite resources and opportunities enable its achievement.

  • Relevant: This determines how well the goal aligns with professional and business objectives, requiring the planner to consider the potential long-term consequences of achieving the goal.

  • Time-based: This ensures that the goal receives adequate yet reasonable attention without detracting from other requirements, obliging the planner to set an end date to achieve the original financial management goal.

Read more: SMART Goals: Objectives for Your Career

7 SMART goals for finance managers

The following seven goals for finance managers represent common objectives for the industry and how the SMART method can apply to these aims:

1. Increase returns

The first step is to make the goal specific by indicating the amount of the increase in returns, such as growing by 1.5% per month through new investments. It's measurable because you can track the progress of the returns as time progresses. This step can involve weekly milestones to ensure the plan remains on track for the target return increase. As the finance manager, you know what resources are at your disposal and can determine the achievability of the SMART structure.

Determining the relevance of the goal means assessing whether the new investments are beyond your risk comfort. Finance managers have a fiduciary responsibility to clients, so the relevance aspect is essential to assessing whether you're acting in the client's best interest. Finally, the timeline for the goal is clear as a per-month expectation. Setting an end date for the objective, such as six months, can help finalize the goal, turning it into an achievement.

Related: A Guide to Finance Skills: Definition and Examples

2. Reduce expenses

Financial managers responsible for overseeing a client's or company's spending can increase profits by reducing costs. A specific goal might include reducing expenses by 7% within three months. Financial reports allow you to easily measure success by determining how much less the company spends. Achievability is essential to proceed with such a goal because an opportunity for expense reduction contributes toward the solution. Examples include renegotiating a lease, downsizing staff, moving to a remote setting, or eliminating non-critical spending.

The relevance of the goal relates to the company's plans, such as addressing economic challenges by reducing spending. Finally, the project's timeline can measure success after a fiscal quarter. This enables you to assess the project's progress and avoid simultaneously making large-scale alterations to spending. After three months, you can check whether the company spent 7% less. If it did, the goal becomes an achievement.

Related: What Are the Different Types of Expenses? (With Examples)

3. Improve diversity

Portfolio diversification is a common risk management method for financial managers, and forming a specific objective can help achieve this. For example, you could state that, within a year, your portfolio is going to comprise 25% high-risk, 50% medium-risk, and 25% low-risk accounts. You can measure this using risk assessment techniques to set thresholds for each of the three standards. Achievability depends on the opportunities available, but most finance managers can seek clients with various goals or discuss changing their portfolio with upper management.

The relevance of diversification depends on the company's goals and your professional objectives. Diversifying can provide new opportunities or increase risk, so measuring whether this aligns with your goals is important. Once you determine this, you can set quarterly milestones to track your progress, with a final date in one year.

Read more: What Are Portfolio Diversification Benefits? (With Types)

4. Grow clientele

Financial managers' responsibilities often include meeting prospective clients and closing deals to secure contracts. A SMART goal can set a specific target for growth, such as gaining five large new clients by the end of the fiscal year. The number of contracts you close measures the objective. Achievability depends on your skill, available time, and initiative.

Relevance depends largely on your autonomy to seek new clients. If you are responsible for identifying prospects and taking steps to secure contracts, this is in line with your regular job as a finance manager. Conversely, if the objective compromises your ability to maintain your regular work, the objective's relevance is questionable. A 12-month timeline can allow you adequate opportunity to pursue your goal while maintaining your existing portfolio.

Read more: 10 Tips on How to Get More Clients and Grow a Business

5. Minimize risk in an overall portfolio

A large aspect of financial management is limiting the risk a client or a business incurs. The SMART approach considers specificity by determining the current risk level and setting a percentage as a reduction goal, such as reducing risk by 30% over the next quarter. This allows you to measure the risk factors over time, ensuring that you remain on track by using your usual calculation approaches and reassessing the objective each month. The achievability of this goal requires low-risk investment, such as converting high-risk investments into government bonds for added security.

For relevance, the goal of minimizing risk balances with the potential of reward. A financial manager balances these to adhere to the client's priorities. The goal is relevant if the client focuses on security rather than short-term payouts. Finally, the timeline of a fiscal quarter allows the client to see immediate results and reassess after a short period rather than changing an investment strategy for longer without measuring its rewards.

Read more: Why Risk Management Is Important (With Strategies)

6. Reduce debt

Debt reduction is one of the main responsibilities of a financial manager because it can negatively impact a client's portfolio. To use the SMART methodology, first set a specific amount of debt to eliminate. You can express this as a dollar value or percentage, such as reducing debt by 20% in one year or eliminating $200,000 of debt in one year. The measurability is simple because each payment is a step forward, and you can calculate the debt-repayment process ahead of time and execute it accordingly.

Relevance depends on the specific client file and goals, but a high priority for many companies is debt reduction. Provided the client doesn't require the funds for operational expenses, an aggressive debt reduction strategy is relevant to a finance manager. With a timeline of a year, the company can complete a full cycle and dedicate the extra annual income toward the debt. After that, the company can determine whether the solution meets its financial requirements.

Read more: 11 Budgeting Tips to Help You Achieve Your Financial Goals

7. Incorporate social networking

Client sourcing is a significant aspect of a finance manager's position, and identifying prospects relies on modern approaches. A SMART goal sets a specific objective, such as joining three platforms in one month and posting at least once per week. It's a goal that's easy to achieve because the tools are no-cost and available to the public. It requires a time investment, but there are usually no achievability challenges.

Its relevance depends on whether you work independently, such as in an agency relationship with a company, or if you work directly under a supervisor. Social networks are relevant for autonomous finance managers, but for those in a company's direct employ, they can create branding conflicts. Provided the goal aligns with the job's requirements, the final step is setting a timeline to reassess. Social networking is ongoing, so once you schedule a posting schedule and get proof of success after one month, you can consider it an achievement and proceed accordingly.

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