The Importance of Financial Management
Organizing, managing, and sustaining your business's finances is a key to continual growth. Financial management can make or break a company depending on how it is utilized. So, how exactly does financial management add value to an organization? Below, I will discuss a financial manager's responsibilities, along with several ideas to support the importance of their presence in a business.
Financial managers basically deal with all of a business's finances. One of their jobs is to assess the current financial situation. Once the evaluation has taken place, they will then build a financial plan for that particular business (Financial Managers). They will then monitor the finances to ensure they are on track to generate profit for the company (Financial Managers). There are several types of financial managers ranging from accountants to attorneys to insurance agents (Working with a Financial Planner). The variety of financial managers makes it possible to get exactly what you want and need from their assistance. The more you know about what you wish to achieve, the more likely you are to attain a profit.
Good financial management can provide the company with a competitive edge. By managing your company's finances, the potential to outdo your competitors is much higher (Williams). Having additional resources to renovate products or offer incentives is one way to expand your business (Williams). An example of a company that manages their finances well is Apple, Inc. In order for Apple to expand while continuing to produce a profit, they must have additional resources. These resources allow them to develop their products and compete with their competition.
Keeping your finances in order may save your business from a financial tragedy during an economic downturn (Williams). Many businesses do not understand the importance of having a manager in place to ensure the security of the finances. Because of this unawareness, the amount of businesses filing for bankruptcy has increased to 57% percent (Williams).
Finding investors that are willing to work with you if you have poor finances can be very difficult. If your financial records have been managed correctly throughout the life of your business, securing funding will be a painless process (Williams). As mentioned above, good financial management is the key to growth for your company. This allows your business to have additional resources to apply towards growth, whether it may be through the product, brand awareness, or expansion (Williams). Once the short term and long term needs and goals are recognized, a financial plan can be formed and put into place.
Having strong financial records is not just appealing to investors. Current and potential employees may look at this component. A potential employee might consider its strength in relation to bonuses, raises, and other employee benefits (Williams). To attract the ideal employee strong finances are a must. Employees should feel confident in the funds, regardless of the state of the economy (Williams).
When financial management is used correctly, the organization is able to evaluate its past and present performance. Having detailed records to refer to enables the company to recognize if profit is present or items need to be adjusted.
"Financial Managers." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics,
29 Mar. 2012. Web. 30 June 2013..
Williams, Ellie. "How Does Good Financial Management Help Your Business?" EHow.
Demand Media, 24 July 2010. Web. 30 June 2013..
"Working with a Financial Planner." Certified Financial Planner. N.p., n.d. Web. 29 June
2013.
Financial managers basically deal with all of a business's finances. One of their jobs is to assess the current financial situation. Once the evaluation has taken place, they will then build a financial plan for that particular business (Financial Managers). They will then monitor the finances to ensure they are on track to generate profit for the company (Financial Managers). There are several types of financial managers ranging from accountants to attorneys to insurance agents (Working with a Financial Planner). The variety of financial managers makes it possible to get exactly what you want and need from their assistance. The more you know about what you wish to achieve, the more likely you are to attain a profit.
Good financial management can provide the company with a competitive edge. By managing your company's finances, the potential to outdo your competitors is much higher (Williams). Having additional resources to renovate products or offer incentives is one way to expand your business (Williams). An example of a company that manages their finances well is Apple, Inc. In order for Apple to expand while continuing to produce a profit, they must have additional resources. These resources allow them to develop their products and compete with their competition.
Keeping your finances in order may save your business from a financial tragedy during an economic downturn (Williams). Many businesses do not understand the importance of having a manager in place to ensure the security of the finances. Because of this unawareness, the amount of businesses filing for bankruptcy has increased to 57% percent (Williams).
Finding investors that are willing to work with you if you have poor finances can be very difficult. If your financial records have been managed correctly throughout the life of your business, securing funding will be a painless process (Williams). As mentioned above, good financial management is the key to growth for your company. This allows your business to have additional resources to apply towards growth, whether it may be through the product, brand awareness, or expansion (Williams). Once the short term and long term needs and goals are recognized, a financial plan can be formed and put into place.
Having strong financial records is not just appealing to investors. Current and potential employees may look at this component. A potential employee might consider its strength in relation to bonuses, raises, and other employee benefits (Williams). To attract the ideal employee strong finances are a must. Employees should feel confident in the funds, regardless of the state of the economy (Williams).
When financial management is used correctly, the organization is able to evaluate its past and present performance. Having detailed records to refer to enables the company to recognize if profit is present or items need to be adjusted.
"Financial Managers." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics,
29 Mar. 2012. Web. 30 June 2013..
Williams, Ellie. "How Does Good Financial Management Help Your Business?" EHow.
Demand Media, 24 July 2010. Web. 30 June 2013..
"Working with a Financial Planner." Certified Financial Planner. N.p., n.d. Web. 29 June
2013.
Source...