Functions of Financial Management

Financial control is the process of preparing, organizing, managing and monitoring financial resources with a view to achieve organizational goals and objectives. It includes all of the functions of finance such as procurement, usage, accounting, repayments and risk assessment.

Economic managers support companies make decisions about allocating capital methods based upon a provider’s long-term goals. They also strategies how to use these types of resources to increase revenue, granted a company’s financial status and anticipated growth.

The first function of financial control is to approximate how much capital a business needs because of its operations. This is done by assessing future bills, profits plus the company’s current plan for the near future.

A financial manager also decides the types of funds that a business may acquire, such as stocks and shares, debentures, loans or public deposit. These sources are selected based on all their merits and demerits and must be secure for the organization.

Another function of financial management should be to allocate a company’s acquired and extra funds strategically for smooth operation. When these money are allotted, a company should take care of the rest of the amount of cash it includes on hand for making it an affordable source for the future.

Having adequate funds on hand intended for meeting initial operational costs and debts is crucial for most businesses. This runs specifically true through the startup stage, when a business may experience losses and negative cash flows. It is necessary for economical managers to keep an eye on and survey on these kinds of negative cash flows in order that the company can budget for the future and keep a steady cash flow.