Financial management: definition, importance and functions
Posted: Mon Dec 23, 2024 6:12 am
What is meant by financial management ? In every business, it is crucial to take care of the state of finances. In this way, there is sufficient liquidity to cover costs and continue growing. Maintaining good buy targeted email list management of a company allows this. However, how? In this post we tell you more about what financial management is , the importance of financial administration , its functions and how the use of technology, such as collection software , can help you improve it.
What will you find in this text?
What is financial management?
Importance of financial management
Functions of financial management
1. Develop the company's strategic financial plan
2. Perform financial analysis
3. Prepare company budgets
4. Analyze whether the projects are viable
5. Monitor how the organization's resources are used
6. Conduct financial audits
7. Conduct financial risk analysis of the company
Technology in financial management
What is financial management?
Let's start by addressing the definition of financial management . This is understood as the process by which a company manages its resources optimally to achieve its objectives.
Unfortunately, many startups are not careful with the management of their resources, as a result of which, for example, at the end of 2023, in Peru, the closure of more than 233 thousand companies was reported.
4-Automate your debt collection management-banner
Importance of financial management
As seen in the example above, one of the reasons why efficient financial management is important is because it helps the company stay afloat. This is achieved because it has the capital to cover its costs and still make a profit.
That is why one of the objectives of financial management is to reach the break-even point, from which profits can be made.
Functions of financial management
As for the functions of financial management, speaking from the perspective of the person in charge of the area or the team itself, these are some of them:
1. Develop the company's strategic financial plan
This plan must be aligned with the organization's general objectives, establishing financial goals, the necessary resources and the deadlines to achieve them.
What will you find in this text?
What is financial management?
Importance of financial management
Functions of financial management
1. Develop the company's strategic financial plan
2. Perform financial analysis
3. Prepare company budgets
4. Analyze whether the projects are viable
5. Monitor how the organization's resources are used
6. Conduct financial audits
7. Conduct financial risk analysis of the company
Technology in financial management
What is financial management?
Let's start by addressing the definition of financial management . This is understood as the process by which a company manages its resources optimally to achieve its objectives.
Unfortunately, many startups are not careful with the management of their resources, as a result of which, for example, at the end of 2023, in Peru, the closure of more than 233 thousand companies was reported.
4-Automate your debt collection management-banner
Importance of financial management
As seen in the example above, one of the reasons why efficient financial management is important is because it helps the company stay afloat. This is achieved because it has the capital to cover its costs and still make a profit.
That is why one of the objectives of financial management is to reach the break-even point, from which profits can be made.
Functions of financial management
As for the functions of financial management, speaking from the perspective of the person in charge of the area or the team itself, these are some of them:
1. Develop the company's strategic financial plan
This plan must be aligned with the organization's general objectives, establishing financial goals, the necessary resources and the deadlines to achieve them.