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The role of finance in business is very important, one of the most important. Financial
management exists to bring the most money to the shareholders and the business itself.
Hiring a good financial manager is key to building AND growing your company.
Some of the things that financial management might involve would be borrowing, investing,
and selling securities to raise capital. Another important job is to oversee all the financial
decisions that go on within a company. Finance workers keep the finances of a corporation
organized and methodically planned out to ensure the company and its shareholder are
making the most money, the best way.
Some of the tools a financial manager may use would be a cash flow analysis, trend ratios or
trend analysis, and ratio analysis. I have used something similar to a cash flow analysis in
my personal finances. I use my banking app to see where money is coming in from and
going out to, to budget my month accordingly. That is the only one that I have used,
however I really enjoy learning about and applying new financial tools to my personal
finances. So, I am interested to see how these tools used in business might also aid me in my
own financial planning.
Finance in a business is when you borrow, invest, and sell securities to get them back in the
long run. You will basically get re paid based on the different income streams from those
previous investment choices. Financial Management is the managing of the finances. You
want to plan, organize and control all finances within the company.
The activities for Financial management can be a wide range of different activities including
the different decisions of investments, finances, and other earnings. When you are in control
of the Finances with an organization you have a very big weight on your shoulders. You do
a lot of budgeting and want to make sure your company is making money and not losing
money.
I am sure most companies use the Microsoft Excel to keep track of a lot of there accounts
and cash flow. You can monitor the health and performance of a business depending on
what formulas you use in your excel grid. Having access to Microsoft Excel is a huge
advantage for businesses. You can run reports, filter your results, and even make all kids of
charts and graphs to show your data. Finance is very important in our everyday lives. We
use finance while paying bills, spending money and creating budgets. Finance is a critical
part of almost, if not every phase of a business and business decisions. Finance role in
business ranges from: planning and budgeting and cash flow management to the capital
structure and how you control risks and costs.
The purpose of financial management is simple, it helps manage the money and the budget
of a business. Financial management helps a business stay open and its employees paid.
Accounting systems, payroll management, tax preparations, inventory and billing are some
of the tools financial managers use to leverage the access and/or monitor the health and
performance of a business.
Being a business owner I have used the majority if not all of the tools, I listed and others. I
recently started real estate investing and although the project has not started, we are already
using these tools for the pre-planning phase. We want to make sure we stay within the
budget, so that our profits are not cut into for being over budget at the end of the project. We
most recently used the accounting system to create a budget plan and allocate the amount of
money we plan to spend in each phase. A corporation's goal is to Maximize shareholders'
wealth and increase or sustain the company's maximum profitability while maintaining a
firm's moral and social responsibility. And to fulfill its financial goal, the corporation needs
to establish financial management team to deal with investing with the available resource
and generate the best return on investment. It is the purpose of financial management.
According to the text from Blackwell publishing, financial management involves three
activities: long-term investment, long-term financing, and working capital. Each activity
needs unique tools, leverage, and staff with ample financial knowledge to achieve the goals
to sustain the corporation's health.
A business can adopt many financial tools to achieve its goals, such as accounting systems
like QuickBooks, inventory tracking systems, payroll management, budget and expense
tools, etc. Many businesses may acquire various tools and software systems to generate the
best result. For example, in my property and casualty insurance business, we recently adopt
a new and sophisticated accounting system name Quickbooks@Enterprise; it is an online
accounting system, and we get a clear sight of income and expense transitions. Since all
transactions are automatically linked to our bank business and trust accounts, it reduces
errors and time and efficiently enhances our financial decisions. The role of finance in
business involves borrowing & lending, investing, raising capital, and selling & trading
securities. Business finance may be defined as planning, raising, managing, and controlling
all the money used or capital funds of any kind used in connection with the business.
Finance is a major function of any business enterprise.
The purpose of these pursuits is to allow companies and individuals to fund certain activities
or projects today, to be repaid in the future based on income streams generated from those
activities. Fiscal management helps to determine the financial requirements of the
organization and leads to take financial planning to the organization. Fiscal management
involves the accomplishment of required funds to the business organization.
The kinds of activities that fiscal management involve the effective handling of money
through planning, organizing, directing, and controlling funds in a corporation or for an
individual. Fiscal management uses ratios, equities, and debts to reach investment goals.
Some of the most used financial tools based on their usage and requirements are common
size statements (vertical analysis), comparative financial statements (comparison of financial
statements), ratio analysis (quantitative analysis), cash flow analysis, and trend analysis.I
remember vaguely using these types of tools when I had owned a few trailers home when I
was in the military along with my sister back in the day and us using an automation finance
management system workflow tool that helped us to streamlines and simplifies accounting
and finance management for our business. Finance plays a huge role when dealing with
business affairs. The purpose of financial management is to make sure your numbers are
adding up. Budgeting, controlling how much you spend and how much you need to save and
being able to project the cost for supplies are all important factors for financial management
in business. I know one tool financial managers use to manage the health and performance
of a business are financial graphs showing areas of growth or declines and financial
statements. During my company's quarterly meeting, our CFO used a graph to show us how
well the company is doing financially as well as projected increase for the remainder of the
year. Financial management not only applies to business but it applies to every day living.
Budgeting your expenses for the week/month, planning ahead for future expenses, and
sometimes just day to day expenses. I working in banking so I see financial management
everyday. I have a lot of customers who still write checks so sometimes they will come in if
they need help balancing.
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