Money, money and money – it is the lifeblood of business and finance can be considered as the nerve center of business. It is no doubt the organization’s financial management creates an indelible mark to determine the ultimate success of the business. The soaring demand for finance professionals has given rise to a whole host of online courses in finance and various certifications.
For ages now, finance has enjoyed its primary role in the general management of the organization and here are the key roles of financial management:
- Accounting and Bookkeeping
It is very important to measure, identify and record all the financial information of the organization. What goes in, what comes out? Financial management comprises of an effective accounting system that provides the overall financial picture of the organization. On the other hand, there is bookkeeping that records the day-to-day transaction of the business and lies at the foundation of the accounting system.
There are several stakeholders that rely on the company’s financial report to make key decisions. For example, shareholders of the business are shared with frequent reports of the financial progress of the business. So, are the stockholders who rely on reports of data forecasting and budgeting when determining to buy and sell. In all cases, accurate data from the financial report is very important to make key decisions
- Payables and Receivables
Managing the cash flow of business – what you owe to your suppliers and what do your customers owe you? It is important to maintain a clear track record of this so that you can stay liquid with the right amount of cash on hand at all times.
- Investment Opportunities
Finance gives you the power to invest in the right opportunities at the right time. Only by considering the financial health of the business and determining its ability to invest, the company can leverage on the right opportunities. Whether you want to invest in an acquisition or new product, it is critical to carefully inspect the different aspects of financial management of the business to make a decision.
Minimal risk with maximum profit is the goal of any business. A healthy financial management system is a prerequisite to minimize unforeseen risks and counteract liabilities. An effective finance system should include adequate insurance for important elements of the organization, budgeting for working capital, controlling debt and maximizing operational flexibility if the business experiences cash flow problems.
Finance is the backbone of any business. Without accurate and timely information from the financial management system, the business is bound to fall to pieces. Ensure the growth of your business by equipping yourself with finance analytics certification and move towards success.