Finance management is the planning, directing, monitoring, organizing, and controlling of the monetary resources of an organization. Companies that provide critical needs for a business are accountants, auditors and taxation experts, financial consultants. Supporting categories are insurance and pension providers, liquidators. Find companies that will help your business in; financial planning - to ensure that enough funding is available at the right time to meet the needs of the business; financial control - to help the business ensure that the business is meeting its objectives; and financial decision-making relating to investment, financing and dividends.
Finance management is the practice of handling a company’s finances in a way that allows it to be successful and compliant with regulations. That takes both a high-level plan and boots-on-the-ground execution.
Objectives of finance management
Ensures a regular and adequate supply of funds to the concern.
To ensure adequate returns to the shareholders which will depend upon the earning capacity, the market price of the share, expectations of the shareholders.
To ensure optimum funds utilisation. Once the funds are procured, they should be utilised in the maximum possible way at the least cost.
To ensure safety on investment, i.e, funds should be invested in safe ventures so that an adequate rate of return can be achieved.
To plan a sound capital structure - There should be the sound and fair composition of capital so that a balance is maintained between debt and equity capital.
Scope of finance management
Financial managers project how much money the company will need in order to maintain positive cash flow, allocate funds to grow or add new products or services and cope with unexpected events, and shares that information with business colleagues.
The financial manager allocates the company’s available funds to meet costs, such as mortgages or rents, salaries, raw materials, employee T&E and other obligations. Ideally, there will be some left to put aside for emergencies and to fund new business opportunities.
Companies generally have a master budget and may have separate subdocuments covering, for example, cash flow and operations; budgets may be static or flexible.
Finance management controls involve analysing how the company is performing financially compared with its plans and budgets. Methods for doing this include financial ratio analysis, in which the financial manager compares line items on the company’s financial statements.
Here on Infobwana, you will find various companies that provide professional financial management services in Zambia.