Financial management provides pathways to attain goals and objectives in an organization. The main duty of a financial manager is to measure organizational efficiency through proper allocation, acquisition and management. It provides guidance in financial planning. It assists in acquiring funds from different sources. Financial management refers to the strategic planning, organizing, directing, and controlling of financial undertakings in an organization or an institute. It also includes applying management principles to the financial assets of an organization, while also playing an important part in fiscal management.
Effective financial management
Effective financial management is vital for business survival and growth. It involves planning, organizing, controlling and monitoring your financial resources in order to achieve your business objectives.
Motive of Financial Management
Profit maximization happens when marginal cost is equal to marginal revenue. This is the main objective of Financial Management.
Maintains proper cash flow
Maintaining proper cash flow is a short run objective of financial management. Thus, Financial Management plays a major role in all parts.
IMPORTANCE OF FINANCIAL MANAGEMENT
During business growth
Financial management is extremely important during this time. As a business grows and matures, it will need more cash to finance its growth. Planning and budgeting for these financial needs is crucial.
Decides fund expansion
Deciding whether to fund expansion internally or borrow from outside lenders is a decision made by financial managers. Financial management provides pathways to attain goals and objectives in an organisation. The main duty of a financial manager is to measure organisational efficiency through proper allocation, acquisition and management.
Guides Financial planning
It provides guidance in financial planning. It assists in acquiring funds from different sources. Finances are one of the main reasons that students drop out of college. By practicing proper money management techniques now, students can feel confident about their ability to manage finances into their adult life, save money and avoid debt down the road. College is also when a lot of people start to build credit.