Financial management refers to the efficient and effective management of money (funds) in such a manner as to accomplish the objectives of the organization. It is the specialized function directly associated with the top management. The significance of this function is not seen in the 'Line' but also in the capacity of 'Staff' in overall of a company. It has been defined differently by different experts in the field.
The term typically applies to an organization or company's financial strategy, while personal finance or financial life management refers to an individual's management strategy. It includes how to raise the capital and how to allocate capital, i.e. capital budgeting. Not only for long term budgeting, but also how to allocate the short term resources like current liabilities. It also deals with the dividend policies of the share holders.
The term typically applies to an organization or company's financial strategy, while personal finance or financial life management refers to an individual's management strategy. It includes how to raise the capital and how to allocate capital, i.e. capital budgeting. Not only for long term budgeting, but also how to allocate the short term resources like current liabilities. It also deals with the dividend policies of the share holders.
Definitions of Financial Management
- Planning is an inextricable dimension of financial management. The term financial management connotes that funds flows are directed according to some plan." By James Van Morne
- "Financial management is that activity of management which is concerned with the planning, procuring and controlling of the firm's financial resources. " By Deepika &Maya Rani
- “Financial Management is the Operational Activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operation.” By Joseph Massie
- “Business finance deals primarily with rising administering and disbursing funds by privately owned business units operating in non-financial fields of industry.”– By Kuldeep Roy
- “Financial Management is an area of financial decision making, harmonizing individual motives and enterprise goals." -By Weston and Brigham
- “Financial management is the area of business management devoted to a judicious use of capital and a careful selection of sources of capital in order to enable a business firm to move in the direction of reaching its goals.” – by J.F.Bradlery
- “Financial management is the application of the planning and control function to the finance function.” – by K.D. Willson
- “Financial management may be defined as that area or set of administrative function in an organization which relate with arrangement of cash and credit so that organization may have the means to carry out its objective as satisfactorily as possible." - by Howard & Opton.
- Business finance can be broadly defined as the activity concerned with planning, raising, controlling and administering of funds and in the business. “ by H.G Gathman & H.E Dougall
- Financial management is a body of business concerned with the efficient and effective use of either equity capital, borrowed cash or any other business funds as well as taking the right decision for profit maximization and value addition of an entity.- Kepher Petra; Kisii University.
- Finance management not only for the business, but also for every expenses. Like its for the home base expenses or the government expenses. The government also need to manage the finance for the develop of the counter and the household also need to manage their expenses properly - By Vinod Verma.
Online Financial Management Tools
- Salesforce Invoice and Payment Platform: It builds strong, collaborative relationships with suppliers, and continuously looking for new solutions that provides five better ways to partner with users. It also has partnered with Taulia, a market-leading provider of invoice, payment, and financial management solutions to provide you with our new Invoice and Payment Portal. The Invoice and Payment Portal will provide users with 24/7 visibility into invoice and payment status, and the ability to accept early payment offers – entirely free of charge.
- BodeTree: It provides real-time access to all of users' financial accounts in one place. Monitor cash flow, uncover trends, and plan for the future in under five minutes.
- Bench: It is an online bookkeeping service that provides users' business with its own personal professional bookkeeper at bank level security of users' financial information, and tax time support to help lower your business-related stress levels.
- Intelli Bookkeeping: A remote bookkeeping solution for startups and small business. The company manages daily, monthly and quarterly financial tasks such as financial reporting, cash flow, budgeting and forecasting.
How to establish sound financial management for your non profit organization and why it is important
Financial management is more than keeping accounting records. It is an essential part of organisational management and cannot be seen as a separate task to be left to finance staff or the honorary treasurer. Financial management involves planning, organising, controlling and monitoring financial resources in order to achieve organisational objectives.You can only achieve effective financial management if you have a sound organisational plan. A plan in this context means having set objectives and having agreed, developed and evaluated the policies, strategies, tactics and actions to achieve these objectives.
Sound financial management will involve you in long-term strategic planning and short-term operations planning. This financial planning should become part of your organisation's ongoing planning process.
Benefits of good financial management
Good financial management will help your organization to:- make effective and efficient use of resources
- achieve objectives and fulfil commitments to stakeholders
- become more accountable to donors and other stakeholders
- gain the respect and confidence of funding agencies, partners and beneficiaries
- gain advantage in competition for increasingly scarce resources
- prepare for long-term financial sustainability.