Financial Management - Meaning, Objectives and Functions Financial Management - Meaning, Objectives and Functions Meaning of Financial Management Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to financial resources of the enterprise. Investment in current assets are also a part of investment decisions called as working capital decisions.
Strategic management is the process of deciding how to arrive at those goals. Managers make decisions in an uncertain environment and develop strategies to approach the uncertainties in a structured way.
Once strategic management decisions have determined how the company will proceed, financial controls evaluate how well the company is following the strategic plans and how valid the strategic decisions were in the first place. The Role of Management Management responsibilities fall into four categories.
Managers must develop strategic plans.
They must implement them. They must track progress and they must evaluate the results. If all four aspects of the managerial role are carried out optimally, the controls put in place to evaluate results will show that the strategic plans developed at the beginning were effective.
The company will achieve the financial and strategic goals set out by its executives and directors. If the controls show that management did not meet the planned objectives, company directors and executives must make changes to the planning process, change the objectives or change management personnel.
Managerial Processes The processes managers use to fulfill their responsibilities fall into two categories. The first is planning.
Managers must make plans to guide company personnel and detail how company objectives will be met. These plans are strategies that are forward-looking and try to predict what will happen and how.
The second process category is controlling.
Managers put controls into place to find out what is happening, how well the company is meeting goals and to determine corrective action if required. These controls look at the present and the past. Strategic Management Strategic management falls into the planning category and is the fulfillment of the first two management roles, the development and implementation of strategic plans.
Managers draw on their experience, the results of past strategic plans and company operational data to develop models showing how the company will achieve the strategic objectives set by the directors and executives of the company. During this process, the strategic objectives are broken into operational objectives that must be met by individual departments.
The strategic plan developed as part of strategic management sets out these objectives in a structured way that can be evaluated.
Financial Controls Financial controls are among the tools that managers use to satisfy the third and fourth aspects of their roles, tracking progress and evaluating results, and they fall into the controlling category.
Other controls may show progress in other areas, such as market share or customer satisfaction, but financial controls are the most important for an objective measure of company performance.
During strategic planning, management defined measurable objectives for operations. Financial controls report on these objectives and to what extent they have been met.
During the reporting period, managers can impose corrective action if necessary and at the end of the reporting period, the results form part of the overall evaluation of the success of the strategic plan.FINANCIAL MANAGEMENT FOR THE ORGANIZATIONAL SUCCESS: CHALLENGE BEFORE FINANCE MANAGERS INTRODUCTION.
agenda and budget relating to the financial activities of a business organization. The financial planning ensures successful and ample financial and investment policies.
You need to be great at financial management if you want to build up your equity and be able to use it to your advantage. Financial Planning is the process of estimating the capital required and determining its competition. It is the process of framing financial policies in relation to procurement, investment and administration of funds of an enterprise. Financial management and business success – a guide for entrepreneurs. Financial management of the business. Approaching financial management as a chore to be delegated leaves you at considerable risk if things go development while also controlling costs? The planning process lets you think through.
The strong financial planning ensures adequate funds, helps to maintain. You need to be great at financial management if you want to build up your equity and be able to use it to your advantage. Financial management is one of the most important responsibilities of owners and business managers.
They must consider the potential consequences of their management decisions on profits, cash. The BCIT Financial Planning diploma program provides students with the financial skills and knowledge necessary to provide personal financial advice in taxation, investments, estate, and retirement planning.
You will create comprehensive personal financial plans, review investment vehicles, and complete a number of Canadian Securities Course (CSC) exams. Planning and budgeting for these financial needs is crucial.
Deciding whether to fund expansion internally or borrow from outside lenders is a decision made by financial managers. controlling. Explore Ashford University's online Business Administration degree courses and classes covering areas of management, leadership, and more.