Financial Management Report: Cash Flow and Planning

This report provides a comprehensive overview of financial management within an organization. It begins by defining financial management and then delves into the crucial role of the finance department, outlining its responsibilities in planning, organizing, auditing, and controlling finances. The report emphasizes the significance of financial management and reporting in providing stakeholders with vital financial information, including budgetary control and the evaluation of financial activities. It then explores various measures for managing cash flow, highlighting the importance of monitoring inflows and outflows to maintain adequate cash levels. The advantages of having a financial manager are also discussed, including their ability to improve performance, productivity, and profitability through efficient decision-making. Finally, the report underscores the importance of financial planning in achieving organizational goals, reducing uncertainty, and supporting stakeholder decisions. The report concludes that financial management and planning are essential for effective and efficient business operations.

Financial management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
A. Define financial management.................................................................................................1
B. Role of finance department....................................................................................................1
C. Financial management and reporting.....................................................................................2
D. Various measure to manage cash flow in the organization....................................................2
E. Advantages of financial manger in the company...................................................................2
F. Importance of financial planning in the organization.............................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Financial management is the process of managing the information and data related to
finance or maintain the finance in the organization to achieve the objective and goal by obtaining
the physical resources. The report highlights the financial management and the role of finance
department in the organization. It explains the importance of financial management and financial
reporting in organization. It also explains the role if cash flow in the organization to manage the
finance in the company and evaluate the flow of finance. The focus of report is on the
importance of financial manager and the importance of financial planning or financial
management in business organization.
MAIN BODY
A. Define financial management
Financial management : It is t eh process of managing finance in the company to accomplish
the goal and objectives of the organization and allocate the finance for the different activities and
function. Financial manager play an important role on the organization to manage the finance
and regulate the information to take the decision regarding increasing wealth of stakeholders and
increase the profit of the company (Joshi, and Rajpurohit, 2016). They provide dividend and
capital gain to raise the wealth of the stakeholders.
B. Role of finance department
Finance department is responsible for managing the finance via assigning and evaluating
the various activities. The role of finance department is to manage the money in the organization.
It performs various functions in the organization such as planning, organizing, auditing and
controlling the finance to complete the task within the resources and provide the proper fun to
the various department to achieve the target and objective on time. The function of finance
department id to produce the financial statement such as balance sheet, cash flow statement,
income statement and ratio analysis to present the financial information in annual report for
taking decisions for planning and making strategies to improve the performance.
The role of finance department is to control the activity and report the financial
information to provide valuable information to the stakeholders (23 Functions and Duties of
Accounting and Finance Department of SMEs, 2016). It helps the organization to prepare the
financial and strategic plan to forecast the future position of the company to improve its
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performance and gather higher share in market in compare to its competitor. It also helps the
company and stakeholders to raise the funds and capital to get higher results.
C. Financial management and reporting
The financial management and reporting help the company to prepare financial reports
like balance sheet, cash flow, profit and loss account and income statements to analyse the
financial performance to the different stakeholders and help to increase the wealth and incomes.
Financial management and reporting is important for the company to provide the financial
information, budgetary control, evaluation of financial activities etc. in the organization.
Recording, summarising, presenting and analysing the financial data and convert them to
information to support the decisions of the company and management team.
D. Various measure to manage cash flow in the organization
Cash flow : It refers to total cash inflow and outflow of the firm in particular accounting
year. Cash flow present the difference between the initial available cash and cash available at the
end of the year. The finance department prepare cash flow statement to regulate the activities and
manage the requirement of cash in the company to complete the task.
Financial manager manage the cash flow by regulating and recording all the financial
activity in the statements to present the true and accurate position of company. To manage the
cash flow of company finance manager monitor the cash inflow and outflow on regular basis
than cut down the unnecessary cost of the company to get the actual cash flow. The regulation of
cash inflow and outflow help the organization to monitor the cash level and maintain the cash in
the company to accomplish day to day requirement of cash.
E. Advantages of financial manger in the company
Financial manager play various task in the company to improve the performance,
productivity and profitability. The role of financial manager is to manage the company
performance by managing the finance in the company and control the activities to minimize the
cost (Zakić, Kovačević and Damnjanović, 2017). The different skills and knowledge of the
finance manager provide various measures to plan the financial activities and allocate the
resources in the organization. The advantage of having financial manager in the company is that
it regulate the activity by using skills and knowledge and take the efficient decision on the basis
of analysing financial data and support the stakeholders to enhance the capital and wealth.
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Financial manager prepare the financial information and make the work easy for the organization
to evaluate performance and managing the finance.
F. Importance of financial planning in the organization
Financial planning help to plan the activities and allocate financial resources to
accomplish the task (Dinu, 2016). It helps to expand and diversified the business via proper
planning to get the effective output to meet the goal. Financial planning r educes the uncertainty
and risk of the company by planning the future activity and events and measure the risk related
to the future activity. It is important for the company to prepare the financial statement and
reports to measure financial position and make decision on the basis of the report. Financial
planning improve the company performance by regulating the activities of employees and
motivate them to achieve the organization goal (Odedara, 2018). It supports the decisions of
stakeholders and help them to understand the financial data and information by presenting the
transactions in precise form.
CONCLUSION
The study summarises the role of financial management in the organisation and provide
the financial information to the different stakeholders to evaluate the financial position. The
finance department play different role like to manage the accounts, prepare statements, provide
information to the stakeholders, plan the activities to increase the capital and wealth of the
company etc. It can be concluded from the report that finance manager prepare the cash flow of
the organization to estimate the budget and control the cash level. The finance manager and
financial planning is important for the company to manage the finance and run the business
effectively and efficiently.
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REFERENCES
Books and Journals
Joshi, M. and Rajpurohit, V., 2016. Pradhan Mantri Jan Dhan Yojana (The Financial Inclusion):
A study of Awareness. Available at SSRN 2816493.
Zakić, V., Kovačević, V. and Damnjanović, J., 2017. SIGNIFICANCE OF FINACIAL
LITERACY FOR THE AGRICULTURAL HOLDINGS IN SERBIA. Economics of
Agriculture, 64(4). pp.1687-1702.
Dinu, O.N., 2016. The implementation of the finacial-accounting information
system. DEZBATERI SOCIAL ECONOMICE, 5(1). pp.13-17.
Odedara, J., 2018. FINACIAL STATEMENT ANALYSIS JYOTI CNC AUTOMATION PVT.
LTD.
Online
23 Functions and Duties of Accounting and Finance Department of SMEs. 2016. [Online].
Available through : <https://accountantnextdoor.com/23-functions-duties-accounting-finance-
department-smes/>
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