The importance of finance in a business can not be emphasized enough. Business
managers and owners use financial data everyday within the operation of their
businesses. Finance is used to analyze the present and project the future.
Companies can not operate without the benefits of financial analysis.
Financial management is the practice of strategizing, directing, organizing, and
controlling financial events and resources within an organization. Financial
management helps attain better allotment and acquisition of financial resources and
guides investment decision.
Activities that aid financial managers are as follows but not limited to: Financial
statement analysis, Estimate the financial impact of projects and initiatives, Prepare
and implement a working budget, Team decision making based on sound financial
data, and Tracking financial performance.
Financial managers have many tools in their bag when it comes to managing the
companies assests. Among those are Accounting systems, Expense tracking,
Budgeting tools, payroll management, Easy billing and invoice tracking, Inventory
tracking, and last but by no means least - Tax preparation.
I have developed a family accounting system based around quicken software that I
have used for quite sometime to help collate bills, pay said, track budgeted
expenses an income as well as assimlate data for year end tax reporting. Not only
is this system helpful in my spending trackage but it also is a must for my
investments and tracking their performance.
The purpose of finance within a business is to allow both companies and individuals
to fund projects for today, to be paid in the future based on income generated
from borrowing and lending, investing, selling and trading capital and of course
raising capital. Accounting can be thought of as a way to keep score of a business's
activities. There is hardly ever a business decision made without first checking the
financials.
A few activities that involve financial management are producing an accurate
financial report, monitoring the fixed and current sides of the balance sheet,
observing the performance of investments and of course advising on matters of
compliance with regards to financial regulations and planning for the dreaded taxes.
As an accounts payable specialist, I use tools to monitor the incoming and outgoing
balances to make sure we always have bills covered. Recently one of our sister
companies had to shut the doors after trying to survive the lockdowns, crazy
inflation and let's not even get started on oil regulations, it got to a point that they
were drowning more and more so shutting down and selling off is the only option
to hopefully breakeven at least. Financial management oversees many operations.
Both the controller reporter and treasurer report to the Chief Financial Officer. The
financial manager will over see dad to day operations. This will include making
financial decisions and collecting data to make decisions daily.
They will make decisions about getting and spending money received from investors
too. A financial manager may be involved in international affairs. This could have
them dealing with exchange rate changes, changes in laws, or dealing with the risk
that may be involved. They may handle business assets as well. They may include
stocks, bonds and properties.One of the tools a financial manager may use is the
TVM (time value of money). This will analyze risk and timing of cash flows. They
may also use liquidity rations to keep track of assets and liabilities. Then another is
profitability ratios. They can use this to track the gross profit margin. I have used
Quickbooks to track assets and gross profit margin. I found it very interesting how
it can even calculate depreciations of items for you. The role of finance in business
is an important one. There are many different parts of finance in management, and
they are all equally important. Some of the roles in finance in business include:
· d d d d d Accounting/Bookkeeping
· d d d d d Reporting
· d d d d d Accounts payable/receivable
· d d d d d Investments
· d d d d d Risk management
There are many different tools that financial managers use to monitor/access the
health and performance of a business, and usually companies use their choice of
programs that works best for them. For example, I was an assistant manager at an
apartment complex, and the program we used was called QuickBooks. It had all the
different programs all in one and made it easy to access and navigate the finances
of the company. It had accounts payable/receivable, which was the outside
companies we used for lawn and pool maintenance, stores, etc. It also was easy to
enter and edit the tenant names and information, and even enter payments and
process payroll. While there are many financial programs that companies can choose
from to best suit their needs, sometimes they may even create their own, that can
be even more beneficial to them. QuickBooks is a great program and tool for
business finances. I have found it to be a great program to utilize for budgeting.
Many companies have started using QuickBook for fiance management. I have also
used this program for financial management of my own business and find it to be
very good to handle all business financial needs.Finance is a critical component in
just about every aspect of a business and allows companies to make grounded
decisions regarding planning, budgeting, risks, cash flow, etc. Finance guides both
long-term strategic decisions and everyday decisions that businesses need to make.
Financial management is the process of managing a company's finances through
organizing and controlling financial activities that will benefit the company. Financial
management includes activities such as managing cash and credit, spending capital,
hedging and investing. Finance managers use financial statements to access and/or
monitor the health and performance of a business. Income statements, balance
sheets, and cash flow statements all provide finance managers with the information
they need to help business make important financial decisions. Finance managers
also use a number of different ratios to help gain insight on different aspects of
financial performance, including asset management ratios, debt management ratios,
etc. While I haven't used any of these tools personally, I've had to work with the
finance mangers within my current organization to get expenses/projects approved.
A lot of times, we're required to provide finance managers with many pieces of
information, in order to move forward with a purchase of a good or service.
