Business organization, an entity formed for the purpose of carrying on commercial enterprise. Such an organization is predicated on systems of law governing contract and exchange, property rights, and incorporation. Before then, let briefly look at Growth and development.
Growth refers to the increase in mass and size of a body or organs. It typically occurs through the multiplication of cells and an increase in intracellular substance. While Development refers to the physiological and functional maturation of the organism. It also refers to the increase in capacity and skill to effectively function.
Financial management is one of the most important aspects in business. In order to start up or even run a successful business, you will need excellent knowledge in financial management. So what exactly is this form of management and why is it important? Read on to find out more.
What is financial management?
Financial management refers to the strategic planning, organising, directing, and controlling of financial undertakings in an organisation or an institute. It also includes applying management principles to the financial assets of an organisation, while also playing an important part in fiscal management. Take a look at the objectives involved:
- Maintaining enough supply of funds for the organisation;
- Ensuring shareholders of the organisation to get good returns on their investment;
- Optimum and efficient utilization of funds;
- Creating real and safe investment opportunities to invest in.
Financial management is also made up of certain element basically financial planning.
Financial planning: This is the process of calculating the amount of capital that is required by an organisation and then determining its allocation. A financial plan includes certain key objectives, which are:
- Determining the amount of capital required;
- Determining the capital organisation and structure;
- Framing of the organisation’s financial policies and regulations.
- Financial control: This is one of the key activities in financial management. Its main role is to assess whether an organisation is meeting its objectives or not.
Why is Financial Management important?
This form of management is important for various reasons. Take a look at some of these reasons:
Helps as in financial planning;
Assists organisations in the planning and acquisition of funds;
Helps organisations in effectively utilising and allocating the funds received or acquired;
Assists organisations in making critical financial decisions;
Helps in improving the profitability of organisations;
Increases the overall value of the firms or organisations;
Provides economic stability;
Encourages employees to save money, which helps them in personal financial planning.
In conclusion, there is always an opportunity to develop your professional skills and climb the career ladder. You can quickly acquire in-depth knowledge of financial management systems and financial management.
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