Money may not bring happiness and it may be the root of evils, but it is what keeps the businesses around the world running. Whether a business works for profit or non-profit, finances are important. Businesses need money like a well needs water. Both require staying full. Hence financial management gains importance over all other functions in organizations.
What do you mean by Financial Management?
Financial Management is one of the critical aspects of any organization. It is a process of planning, organizing & monitoring financial resources with the aim to achieve organizational goals and objectives.
What are the basics of Financial Management?
Financial management basics include managing the routine-wise operations by keeping them within the budget of business with long-term investments in equipment, also obtaining the financial support for all your operations.
If you are an aspiring finance professional, a financial analytics course can help you with all the basics. The ultimate goal of any business is wealth maximization, which can be achieved through the following 5 activities of financial management:
Estimation of Capital Requirement
How much money is required? The answer to this question lies in how financial managers estimate the capital requirement. It is arrived upon after estimating the company’s present and future costs and profits, purchase of fixed assets, working capital requirement, and business plans for expansion.
Procurement and Allocation of Funds
Where will the money come from? Financial management ensures a regular and adequate supply of funds by identifying sources of funds and procuring them at the lowest cost. After the funds are pooled, the next objective is to prudently invest them in different assets for profitability, liquidity and safety.
Determining the Structure of Capital
What proportion of capital should be invested and how? This is where financial management comes into the picture. The primary aim of sourcing capital is to grow it to earn returns and maximise shareholder wealth. This is done by determining whether the entire capital should be invested in the business or the market. There is also a decision to be taken regarding short-term and long-term investment as well as debt-equity mix.
Distributing the Surplus
Where to dispose of the surplus? Here, the surplus refers to profits. The company can either retain the profits entirely to re-invest in the business to expand or diversify. However, if there are shareholders, it makes more sense to distribute this profit by declaring dividends and bonus. All these decisions fall under the scope of financial management.
Maintaining Financial Control
How much return has the capital earned? Financial management is also responsible for exercising control over money through financial performance evaluation at regular intervals. This is done through financial forecasting, ratio analysis, audits and analysis of accounting/bookkeeping reports. All these techniques will give results on Return on Investment (ROI). The overall control of where the money comes from and where it goes lies solely with financial managers.
Also Read: 8 Major Roles and Functions of Financial Management
Want to get more insight into the scope of financial management activities? You can consider applying for finance management certification to dig deeper into this area of business.
Whether you are looking for a diploma or executive qualification, professional courses in finance and accounting are an excellent investment for anyone who wants to succeed in financial management within the business or other sectors. Especially for those who lack the time to indulge in full-time studies, they can select from a plethora of finance courses online. Equip yourself with a greater understanding in order to manage your finances effectively.
The Content of Financial Management Course
These courses are devised in such a way that no matter what background or position, it delivers a comprehensive understanding of the importance and impact of financial control in any organization. You will get to learn core concepts of financial management including cash flow, budgeting, working capital, financial indicators, forecasting and many more.
Who Should Consider Taking Financial Courses Online?
Is it just the finance department that needs to understand finance and its related concepts? The answer is no, even a project manager or human resources personnel will benefit from gaining financial knowledge. Since finance extends its role throughout the business, right from the making of the product to the final delivery and customer service, everyone can benefit from learning financial courses online.
Also Read: Financial Management Concepts in the Modern World
Top Reasons to Consider Financial Management Courses
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Choose from a variety of careers
From private sectors to public sectors, you have a diverse set of career opportunities to choose from. Some of them include financial analysis, investment banking, accounting, real estate, economics, entrepreneurship and more. Whether you are a beginner thinking about the right career path or a working professional who wants to be able to increase their chance of career growth, you can greatly benefit from professional courses in finance and accounting.
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Demand
According to a survey conducted by the US Bureau of Labour in 2014, studies predicted that there would be a 12% growth in the number of financial analyst jobs in the decade spanning from 2014-2024. Now, this is way faster when compared to the average growth rates of other jobs. And, the reason for this can be attributed to the growing complexity and diversity of business. By empowering yourself with financial skills, you would possess top-notch decision-making skills that contribute to strategic business goals.
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Salary
Again, as this role requires great number crunching and quantitative skills, finance jobs are often paid well at entry and management level. The overall earning potential is within a relatively higher spectrum.
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Career Growth
In today’s competitive world it is highly imperative to stay ahead. A skill that will never go out of fashion is that of finance and there are tremendous growth opportunities as well. For self-starters and those employed within organizations, they can work up the proverbial ladder with plenty of potential for growth.
If you succeed at logic and strategy, have a solid aptitude towards numbers and love the thought of a fast-paced career, then pursuing professional courses in finance and accounting is the way to go.
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