Importance of Financial Management and Role of Financial Managers

This report discusses the concept of financial management and its function in an organization. It explains the role of a finance manager in a company and sources of finance for the short-term and long-term. The report emphasizes the importance of financial management in making financial plans, taking good financial decisions, maintaining stability and growth, and proper planning of taxes.

Task 4
FINANCIAL MANAGEMENT

Question
1. 1000 words (minimum words 900 – maximum 1100 words)
2. Importance of finance functions
3. Describe the role of Financial management/managers
4. Describe sources of finance

Content of the Report
1. Introduction
The term financial management refers to the process of planning, controlling
and directing the financial activities to assure the procurement and proper
utilisation of funds (Behbahaninia, Akbarian Shurkaei, and Hosseinzadeh.,
2019) . The following report looks into the concept of financial management
and its function in an organisation. Moreover, this report also represents the
role of a finance manager in a company and sources of finance for the short-
term and long-term.

What is Financial Management and
Functions within an Organisation
 Explain what financial Management is.:
Financial management is the principle of management that is applicable in a business
enterprise to organise its finances in an appropriate manner. This management has
three elements that covers the decisions regarding investments, financial and dividend
decision. These segments involves capital budgeting decisions, funds raising decisions
from correct sources, and net profit distribution decisions respectively.

Continue…
 Explain the functions of financial Management within an
organisation.
 The management of this kind helps in the evaluation of the
capital requirements which is based on expected costs and
upcoming profits.
 It helps in selecting the appropriate sources of funds from the
available sets.
 It assists in managing the cash and make sure on the availability
of cash in the business firm so that operational activities can be
conducted in a smooth manner

Importance of financial management.
 Make financial plans
 Chances of investment
 Take good financial decision
 Good strategy maintain economic
stability and growth
 Proper planning of taxes

Role of Financial Managers
Describe is the role (job) of the Financial Manager in a company?
 Delivering and analysing financial details: In this particular the role of finance manager in every
firm is they manage the finance related information and provide the information to all the
departments of the company so, everyone should aware about the financial information of the
company (Giosi and Caiffa., 2020).
 Continuously watching and interpreting the cash flows and forecasting the future trends also: In
this point the responsibility of every manger in every business is to monitoring the cash flows of
the company they need to check the inflows and outflows of the firm and also should aware about
the trends which come into the near future so, by using that trends company avail that type of
service and goods into the market which helps the business growth.

Sources of Finance
 What sources of Finance are available to an organisation? What options
does a business have to get capital (funds/money) to start or run the
business – mention short-term and long-term finance options
Short-term sources:
 Trade credit
 Loans from commercial banks
 Commercial paper
Long-term sources
 Equity Capital
 Debentures
 Preference capital
 Retained earnings

CONCLUSION
As it is concluded from the above report that the financial management is planning
the activities, and organizing the task and then start the process of staffing according
to the need of the company and then direct and control the employees of the
organization so, they perform the task with their full- efficiency and achieve good
results as well into the company.

References
 Behbahaninia, P.S., Akbarian Shurkaei, R. and Hosseinzadeh, F., 2019. Relationship of
capital structure choice, information asymmetry, and debt capacity in Tehran Stock Exchange
listed companies. Financial Management Perspective. 8(24). pp.9-34.
 Byun, H.S., et.al., 2019. When and why do takeovers lead to fraud?. Financial
Management. 48(1). pp.45-76.
 Esau, T.J., et.al., 2019. Economic and management tool for assessing wild blueberry
production costs and financial feasibility. Applied Engineering in Agriculture. 35(5). pp.687-
696.