Analyzing Financial Management, Reporting, and Planning Processes

This essay provides an overview of financial management and financial reporting, highlighting the role of the finance department in maintaining a firm's financial health. It discusses the importance of financial planning, monitoring, and controlling financial transactions to improve a company's financial performance and profitability. The essay differentiates between financial management and financial reporting, emphasizing the significance of cash flow management and the responsibilities of financial managers in ensuring sufficient liquidity and making sound investment decisions. Effective financial planning is crucial for balancing cash inflow and outflow, enhancing the company's competitive position, and maximizing profit earning capacity through strategic investment appraisal techniques. The essay concludes that implementing robust financial management practices is essential for establishing internal control, improving profitability, and achieving overall financial success in business.

Financial Management

Table of Contents
EXCECUTIVE SUMMARY...........................................................................................................3
INTORDUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

EXCECUTIVE SUMMARY
Financial management is nothing but a process of planning, monitoring and controlling
all those activities of business which have direct or indirect impact over the financial position
and performance of company. Financial reporting is a part of financial management that includes
process of analysing and summarising each financial transaction of the company and report them
to the users of financial reports. Monitoring and control of movement of cash and cash
equivalents is essential task of financial managers. With the help of it, the managers can improve
the financial position and performance of the company and also can improve the profitability of
firm.

INTORDUCTION
Financial management is a set of various guidelines and procedures that helps the
managers in development of planning, utilizing controlling all the financial resources held by the
business organization (Anwar, 2015). The present essay contains a brief discussion of financial
management and financial reporting along with role of finance department in the firm. In
addition, it shows management of cash flow, importance of finance managers, financial
management or financial planning for a business.
MAIN BODY.
Financial management is a part of overall management of the company through which the
managers perform their managerial functions in order to plan, monitor and control overall
financial transactions made by company (Lin, Yang and Chang, 2016). In addition, financial
management also provides various methods with the help of which managers of company can
maintain their eyes on financial performance of the firm such as ratio analysis. A finance
department of the company mainly play a vital role in maintaining financial health of the firm.
The department is also responsible for preparing records of all the financial transactions incurred
by the company during a specific time and providing sufficient details to managers so as help
them in effective performance of their managerial functions. In simple terms it can be said that
the finance department is a core element of each business organisation. It helps the company in
maintaining summary record of each financial transaction of firm and keeping the effective
financial health of the business.
There are two major terms i.e. financial management and financial reporting. Both are
different from each other. Financial management refers to planning, analysing, monitoring and
controlling of various business transactions (Financial Management, 2018) (How To Manage
Cash Flow In Small Business, 2018) . On the other hand, the term financial reporting refers to
analysing various financial transactions of the company and preparation of a summary report
containing each of those activities of the firm. In addition, to this, the financial reporting process
also includes providing relevant information to the users of financial reports such as
stakeholders, board of directors, managers, etc. In the peocess of financial reporting, the financial
managers prepare various reports such as profit and loss statements, cash flows, statement of
financial position, etc. All these reports helps in providing several informations to their users.

Such as income statement provides information regarding profit generated by the business during
a specific time along with a range of expenses and incomes incurred by the company. Statement
of financial positions shows the actual financial position of the company at a specific point of
time.
Cash is the major financial resource of the firm used by the firm in meeting its day to day
requirements. The amount of cash held by the firm show liquidity of the company. Maintenance
of sufficient amount of liquidity within the business is an essential task of each financial
manager. Insufficiency of the cash and cash equivalents can result in maintaining smoothness in
the workings of company (Lai, 2017). In this regard, it can be said a financial manager of
business organisation needs to develop their plans regarding maintaining sufficiency of the cash
and cash equivalents. The cash flow management includes formulation of plans regarding
maintenance of appropriate account receivables and payables, planning for setting maximum
credit limit for4 clients, preparation of cash budget in order to pre estimating the financial needs
of the firm, etc. A financial managers is required to develop their plans and procedures for these
contexts. It would help them in maintaining effective monitor and control over the movement of
cawsh. In addition, preparation of estimated cash buddgets would also make them in identifying
various areas in which the company would be needed to utilise their financial resource. Along
with this, it would also provide the information regarding identification of several areas from
whicbh the company would be able to generate cash and cash equivalents in order to fulfil their
requirements relating to maintaining liquidity in the business.
Financial manager can be termed as one of the key managerial person of the company.
The managers plays a vital role within the business. They are given a responsibility to track day
to day business operations of the company that affects the financial resources of the company. In
addition, they are also responsible to crack the requirements of financial resources and formulate
their strategies and plans for the business so that they could maintain sufficiency of financial
resources within the firm. Furthermore, the analysing various options available to the company
for investing their excessive of financial resources and choosing the best option for the company
is also one of the major responsibility of a financial manager (137 The Role of Finance and the
Financial Manager, 2017) . By fulfilling each responsibility provided to financial managers,
they ensure improvement in the financial performance and profitability of the company. Along

with this, they also ensure maintenance of sufficient amount of liquidity and prevent it to reach at
the winding up condition.
Therefore, it can be analysed that formulation of effective financial plans or imposition of
effective financial management within the business is required by each company. Formulation of
effective financial plan is essential to maintain an appropriate balance between inflow and
outflow of the financial resources (Financial Planning - Definition, Objectives and Importance,
2018). In addition, with the help of appropriate financial management and adoption of the best
methods and techniques of financial management, the financial managers can build ability of the
business in improving its overall financial performance in the competitive market and improving
its financial health as well. In addition, by adopting the appropriate technique relating to
investment appraisal, managers of the can improve the ability of firm in increasing its profit
earning capacity by earning the maximum profits from investment of excessive of fund held by
the company.
CONCLUSION
From the study of above essay, it can be seen that the financial management is an
essential part of each business. A company who involved methods, tools and techniques in the
business activities, can effectively establish an effective internal control within the business.
Further, it can also be seen that with the help of effective financial management, the managers of
the company can develop their plans in order to improve the profitability along with improving
financial performance of the business.

REFERENCES
Books and Journals
Lin, W.R., Yang, F.J. and Chang, H.C., 2016. A Discussion of College Students' Financial
Planning Awareness and Financial Planning Ability: A Case Study of a University in
Taiwan. Journal of Accounting, Finance & Management Strategy, 11(1).
Lai, K.P., 2017. Unpacking financial subjectivities: Intimacies, governance and socioeconomic
practices in financialisation. Environment and Planning D: Society and Space, 35(5),
pp.913-932.
Anwar, M., 2015. Contingency theory and its implications to corporate financial planning and
organization structure. Jurnal Aplikasi Manajemen, 13(3), pp.363-370.
Online
Financial Management. 2018. [ONLINE] Available through
<https://www.toppr.com/guides/business-environment/business-functions/financial-
management/>
How To Manage Cash Flow In Small Business. 2018. [ONLINE] Available through
<https://www.profitbooks.net/manage-cash-flow-small-business/>
137 The Role of Finance and the Financial Manager. 2017. [ONLINE] Available through
<https://opentextbc.ca/businessopenstax/chapter/the-role-of-finance-and-the-financial-
manager/>
Financial Planning - Definition, Objectives and Importance. 2018. [ONLINE] Available
through <https://www.managementstudyguide.com/financial-planning.htm>