Financial management

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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.
Contents
[hide]

1Definitions of Financial Management

2Objectives of Financial Management

3Scope of Financial Management

4Financial Management for Start Up

5Online Financial Management Tools

6See also

7References

Definitions of Financial Management[edit]

"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[1]

"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.[2]

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 country and the household also need to manage
their expenses properly - By Vinod Verma

"Financial management refers to proper and efficient use of money" and it plays a significant role in
analyzing to invest in profitable business enterprise..Return on Investment must be greater than the
invested amount..By Ibrar Alam.

Objectives of Financial Management[edit]

Profit maximization occurs when marginal cost is equal to marginal

revenue. This is the main objective of Financial Management.

Wealth maximization means maximization of shareholders' wealth.

It is an advanced goal compared to profit maximization.[3]

Survival of company is an important consideration when the

financial manager makes any financial decisions. One incorrect
decision may lead company to be bankrupt.

Maintaining proper cash flow is a short run objective of financial

management. It is necessary for operations to pay the day-to-day
expenses e.g. raw material, electricity bills, wages, rent etc. A good
cash flow ensures the survival of company.

Minimization on capital cost in financial management can help

operations gain more profit.

Scope of Financial Management[edit]

Estimating the Requirement of Funds: Businesses make forecast on

funds needed in both short run and long run, hence, they can
improve the efficiency of funding. The estimation is based on
the budget e.g. sales budget,production budget.

Determining the Capital Structure: Capital structure is how a firm

finances its overall operations and growth by using different sources
of funds.[4] Once the requirement of funds has estimated, the
financial manager should decide the mix of debt and equity and also
types of debt.

Investment Fund: A good investment plan can bring businesses

huge returns.

Financial Management for Start Up[edit]

For new enterprises, it is important to make a good estimation on costs, sales. [5] Consideration on
appropriate length sources of finances can help businesses avoid the cash flow problems even the
failure of setting up. There are fixed and current sides of assets balance sheet. Fixed assets refers to
assets that cannot be converted into cash easily, like plant, property, equipment etc. [6] A current asset
is an item on an entity's balance sheet that is either cash, a cash equivalent, or which can be
converted into cash within one year.[7] It is not easy for start ups to forecast the current asset,
because there are changes in receivables and payables.[8]

Online Financial Management Tools[edit]

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.[9]

BooksTime: They offer a remote accounting & bookkeeping solution

for startups, small businesses, and nonprofits. In addition to
providing customized financial dashboards, they handle reporting,
budgeting and forecasting, as well as routine bookkeeping tasks
and also catch-up/clean-up projects.[10]

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.[11]

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.[12]

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.[13]

Managerial finance, a branch of finance concerned with the

managerial significance of finance techniques

Corporate finance, a branch of finance concerned with monetary

resource allocations made by corporations

Financial management for IT services, financial management of IT

assets and resources

Financial Planning Association, an organization for finance and

economics students and professionals

Financial Management Service, a bureau of the U.S. Treasury

which provides financial services for the government [14]

Financial planner

Finance

See also[edit]

References[edit]
Wikiquote has quotations
related to: Financial
management

1.

Jump up^ "Financial Management: Definition, Aims, Scope and

Functions". YourArticleLibrary.com: The Next Generation Library.
Retrieved 2015-11-04.

2.

Jump up^ "Business Finance and Financial Management". UpFina.

Retrieved 2015-11-04.

3.

Jump up^ "Wealth Maximization". eFinanceManagement.

Retrieved 2015-11-04.

4.

Jump up^ "Capital Structure Definition | Investopedia". Investopedia.

Retrieved 2015-11-04.

5.

Jump up^ Nobanee, Haitham; Abraham, Jaya (2015). "Current assets

management of small enterprises". Journal of Economic Studie.

6.

Jump up^ "What are fixed assets? | The e-conomic Accounting

Glossary". www.e-conomic.co.uk. Retrieved 2015-11-04.

7.

Jump up^ "Current Asset Definition AccountingTools". www.accountingtools.com. Retrieved 2015-11-04.

8.

Jump up^ "The Top 4 Cash Flow Forecasting

Mistakes". Entrepreneur. Retrieved 2015-11-04.

9.

Jump up^ "Salesforce Supplier Welcome |

Taulia". supplier.taulia.com. Retrieved 2015-11-04.

10. Jump up^ "Hassle-Free Bookkeeping For Small Business". HassleFree Bookkeeping For Small Business. Retrieved 2016-09-15.
11. Jump up^ "Simplify Your Business Finances - BodeTree". BodeTree.
Retrieved 2015-11-04.
12. Jump up^ "Features". bench.co. Retrieved 2015-11-04.
13. Jump up^ "Services - Intelli Bookkeeping". Intelli Bookkeeping.
Retrieved 22 April 2016.
14. Jump up^ faustin.G. karamage

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