Financial management is one of the most important aspects of any company or business. Financial management refers to managing and controlling the financial flow in a company.

It overlooks every aspect of how money is coming and is being utilize in a company. Financial management makes sure all the departments are getting enough money, and they are on track.

Financial management is something we cannot ignore because the whole company’s money and resources are at stake. If the company does not utilize its resources carefully, it can significantly lose or even go bankrupt. So financial management is not only related to a specific project, but it manages and runs over the whole company.

financial management

Functions of Financial Management

A financial manager controls financial management. A finance manager has many duties and functions to perform. Some of the functions of financial management are discuss below:

  1. Look for sources of funds

Before starting any project in a company, a financial manager must look and arrange for funds to help with the project. The funds can be raised from different sources such as equity shareholders, bank loans, public deposits, etc.

  1. Utilization of funds

Once the funds are collect, financial managers also must make sure how to utilize them. Financial managers allocate resources to different departments and projects according to their needs. They also make sure that the resources are efficiently.

  1. Investment

Financial management also includes making decisions on where to allocate the funds to create profitable revenue. They have to make sure that the investment is suitable and safe, and they will profit from it.

  1. Cash Management

Financial managers are also responsible for managing cash in the company. They have to keep records of wages, salaries, bills, payments for other equipment or purchasing or raw materials, etc. Finance management includes all the records of the transactions of the company.

Importance of Finance Management

Finances and resources are essential things in any company. Without money, no company can run, and every business will fall apart. Finance management helps in keeping track of transactions in a company. There are also so many benefits. Some of them are listed below:

  • Control of cash Flow

The most important thing financial managers do is control and manage the flow of cash in the company. They allocate resources and give a limited budget to different departments to waste less and work efficiently.

  • Increase the Value of Company

Finance management makes sure that no funds and resources will be waste and every penny is invested in getting maximum profits. In this way, the company’s value will be increase. They also make long-run plans about the finances of the company.

  • Helps in Decision Making

Finance managers are always included in any ongoing project. They help business leaders execute projects more efficiently and provide ideas for utilizing the sources better. They also offer up-to-date financial reports to stakeholders and leaders of the company.


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