FINANCIAL MANAGEMENT

Financial Management

Financial Management

Introduction

Financial management is a set of core activities in an organization. It ensures that the financial aspects of project (e.g., budgeting, financial reporting and other necessary procedures) are performed in a controlled manner. Financial management focuses on how, when and why the money is or should be allocated to project activities. Management can also set priorities for the organization. In addition, it supports the analysis of financial results, which measure the 'health' of the organization, while protecting the interests of the organization and the public. Finally, stay within the law and provide an acceptable guarantee to donors that their funds are used properly, requires reliable internal financial procedures to be implemented by the CFO of the organization. There are two important aspects of financial management that must be mentioned. The first refers to all aspects of planning for the fiscal year, in particular the development of budgets and cash flow projections. These documents are prepared before the start of the project and the figures are based on assumptions. The second aspect is the set of financial records in writing. They are prepared for the implementation of the project. We also focus on the financial performance of the organization. (Singleton, 2004)

Financial management, several fundamental questions must be asked, whether in order to meet the needs of an individual or of a company. What investments to choose? What funding you? Choose short-term, medium term or long term? How to organize these financial activities in everyday life?

The management objective is to maximize financial gains or profits to increase corporate value in the case of a contractor and to increase the portfolio's value in the case of an individual. For example, survive in business, be more efficient than the competition, minimize costs and maximize profits and maintain stable growths of earnings are all objectives that seek to resolve financial management.

An important concept to master in financial management is the role played by the financial institution. It acts as an intermediary between investors wishing to invest and companies seeking a funding source. The stock market allows investors as well as to transact business without direct recourse to an intermediary. (John, 1997)

Financial Budget

A budget is a plan that specifies how much money an organization thinks it can bring back and how much it will spend over a certain period. The annual budget for the whole year should be completed by the end of the year. The budget is usually organized into two parts - one called the other income and expense.

When you decide on the format of your chart of accounts, you must find a balance between, on one hand, the need for detailed information and, secondly, the need for simple tables. For example, it is easier to combine binoculars, bicycles, bicycle repair kits, computers, etc. You can get a good idea to design a chart of accounts by visiting similar organizations that are well managed, approximately the same size and that have existed for some ...