Financial management is associated with planning, control,
organization and utilization of funds and other resources in an organization.
Fund management is an important aspect of financial management. Since one of
the key purposes of a business is to make a profit, financial management is an
integral part of the general management process.
Any business will exist only when it has finance. Business thrives on
money and a business organization must have money to make money. Thus, a
business will be managed efficiently only when its funds and resources are
managed efficiently. Thus, financial management is a specialized function of
the general management process and it helps in the procurement of finance as
well as the efficient utilization of the same to achieve the business goals.
All business and management functions such as research and
development, production, sales and marketing, human resources as well as
purchases are dependent on the timely availability of requisite finance for
their smooth operation. Thus, the survival and growth of an organization is
completely dependent on how its finances are managed.
In order to start and grow a business, funds are needed at every step.
The arrangement of this required finance at the opportune time is the function
of finance management. The finance sources have to be determined by the finance
management and must be evaluated for their risks. The finance function must
take care of the terms and conditions associated with getting the finance as
well as the cost at which it is obtained.
The efficient management of finance ensures that the finance obtained
is returned with ease and on time. This will build the future credibility of
the business as well as its goodwill in the market. The finance function must
ensure that the inflow and outflow of funds is managed with care. This will
ensure the profitability of the business.
Finance is however not an independent function. Much as every other
function needs finance for smooth operations, all other functions must go on
efficiently to keep the flow of finance smooth as well. Since competition in
business is dynamic and always expanding, finance management of a business is
an ever-challenging task. Every single business decision is closely related to
the finance available. It requires immense skill to manage finance even as new
innovative products and techniques are created.
Financial management refers to the process of managing an organization's financial resources to achieve its goals and objectives. It involves planning, organizing, directing, and controlling the use of financial resources, such as budgeting, financial analysis, and risk management. Effective financial management is essential for the long-term success of any organization.
ReplyDeleteFinancial management is integral to the management process because it encompasses planning, organizing, directing, and controlling financial activities crucial for the organization’s success. It supports strategic decision-making, ensures financial stability, controls costs, manages risks, and enhances stakeholder value. By integrating financial management into the broader management process, organizations can achieve their goals more effectively and sustainably. Best Cash Flow Forecasting Software | Financial Forecasting Strategy
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