Scope of Financial Management : Financial management for businesses
The competition in the market is growing at a fast speed. To sustain, any business needs proper management. The management does not only include managing people and operations of the business, but it also includes managing the funds as well. Financial management is done in all types of businesses and at every level. The financial manager has to keep a close track of the inflow and outflow of cash and other monetary assets. The person has to pay attention to the most minute payments and revenues. The difference of a single penny can bring many fluctuations in the final accounts of the company, or business.
In India, the scope of financial management is vast. According to www.businessdictionary.com/, the literal meaning of financial management is “the planning, directing, monitoring, organizing, and controlling of the monetary resources of an organization.” And, all these are the roles of a financial manager. A company would like to hire a financial manager who is able to plan the expenses, direct the outflow of cash and organize the expenditure. Along with this, the person should have the competency to control the flow of money and monetary resources in the company. Moreover, the person should have the management skills to execute all these duties simultaneously.
The following are the responsibilities that a financial manager has to take care of.
- Reviewing financial reports, monitoring accounts, and preparing financial reports. After the preparation of financial reports, the manager also has to announce the financial forecasts.
- Investigate ways to increase profitability. To do so, the financial manager has to analyze markets for business opportunities. The new opportunities include expansion, mergers or acquisitions.
- Planning and Financial Management deals with financial decision making in any firm. Companies with every size need a strong financial plan to remain profitable.
- The Financial Managers also direct the activities of employees in branches or departments.
- They also fulfill the responsibility of ensuring compliance with applicable laws and procedures.
Since a career in financial management is very successful and many people are choosing it, the jobs in this field are also numerous. Beginning the journey as a trainee to leading a whole team hones your skills and let you emerge as a successful leader.
- The expertise in financial management is at various levels. Even a single certificate makes you stand apart from all the others. Candidates with expertise in accounting and finance, advanced degrees and certifications have stronger job prospects.
- Financial managers are often employed in banking and finance, healthcare and insurance industries, universities/colleges, as well as by private sector and government agencies.
There are various institutions in India, both public and private, that offer financial management courses. The courses are at different levels. These levels begin with certification courses and head to doctoral programs. Higher the education level, the higher is the salary offered to the candidate. One can easily get enrolled in the courses. Students prefer opting for internships during the course of their study which helps them get the required skills. It results in the easy acquisition of jobs.
Though there are no pre-requisites to becoming a financial manager, students from commerce and finance background are considered more suitable to take the course. The educational requirements are at least a bachelor’s degree in finance, accounting, business administration, and economics or in a related field. If the candidates have work experiences and/or advanced degrees, such as Masters in Business Administration are preferable by employers.
Financial Management is versatile, dynamic and all-pervasive. It is needed at all levels of the businesses. Financial managers may begin their careers in business or financial roles, such as loan officers, financial analyst or accountants. With experience or additional education, one can advance to positions such as a financial controller or accounting manager.
Since financial management includes money, how can we forget including salary in the article? Salary plays a vital role when one picks a particular career option. For the finance management graduates, the industry pays well to the skilled and talented pool of candidates, provided they are well versed with the know-how of their domain. Experienced candidates can grab a high annual package in comparison with the newcomers.
There are numerous benefits of financial management for businesses.
- Financial management increases the chances to maximize the profits to be earned in the short term.
- It ensures the growth of capital value in the long term for any organization.
- Strong financial management makes raising finance easier and that too at a lower cost.
- Getting loans for businesses is easier because the financial institutions and investors prefer investing money in those institutions where finances are controlled.
- Good financial management leads to transparency. It also lets you know about the actual financial position of the business. Transparency always results in goodwill, and goodwill is an asset that brings the money in.
There are a lot of advantages to financial management for individuals as well. People from different backgrounds are choosing financial management as a good career option. The industry also pays well to these employees. Once an individual enters the market as a fresher, he/she marks the beginning of their career. There are many designations associated with financial management students as there are many jobs for each domain. The designations are distributed according to their education, work experience, and the most important, skills. The financial management trainees or employees have to collaborate with all the departments of the company and then get the financial reports ready.
A financial manager can himself/herself invest into a business and become an entrepreneur. Though top banks of India recruit these people, entrepreneurs are always willing to establish their own businesses. Having controlled finances results in the good management of the business, financially and it also helps the smooth execution of operations of the business. There are many Chartered Accountant firms who are always eager to hire competent financial managers. Auditing and accounting are practices that can be done as freelancing opportunities as side businesses are always beneficial.