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Financial management is
extremely important for an organization. In order to achieve the organizational
objectives and goals, it’s vital that they have a strong financial management system.
Financial management is theprocess of monitoring, controlling, organizing and planning
the financial resources. It controls the financial activities in a firm like,
risk assessment, payments, accounting, utilization and procurement of funds,
and every other money related things.

Since the era has digitized
in 2019, with several businesses emerging, it’s necessary for them to manage
their finances well for their long term sustainability. It’s important to have
strong financial management to provide economic stability, increase the overall
firm’s value, improve their profitability, assist in financial decision making,
effective allocation of funds and a sustainable financial planning.

Proper management of firm’s
finances provides fuel to it while ensuring efficient functions at the same
time. They firm may expect to deal with several barriers and shortcomings, if
their finances are not managed well. It could further effect their growth and
development.

Financial Management ensures
supply of funds in the firm, creation of safe and riskless opportunities of
investment, utilization of funds optimally, and ensuring good returns to the
shareholders. It also involves the financial planning of the firm including the
amount of capital required, capital structure and organization, andframing of
financial regulations and policies of the firm.

Almost all the firms in 2019
have a separate financial management department looking after financial
affairs. They are aware of the fact that due to intense competition in this
digitized era, it’s easy to lag behind the competitors due to poor financial management.

Financial Management
department has numerous functions including:

  • Financial control: Planning, organizing and obtaining of
    funds along with analyzing the long and short term finances.
  • Efficient money management: Effective management of money to
    cater the financial needs such as purchase of inventory, meeting liabilities,maintaining
    stock, paying bills and salaries.
  • Profit allocation: The division of net profit fairly, tokeep
    a part for the firm for its innovation and expansion while distribution of rest
    as dividends.
  • Capital structure formation: Analysis of Debt-Equity for long
    and short term while considering the amount that needs to be raised through
    external sources.
  • Calculation of required capital: calculation of the required
    funds as per the policies of expected profits and expenses.

Study of financial management
in 2019 has its perks attached. It has diverse career opportunities opening job
openings like credit analyst, investor relation executive, budget analyst,
personal financial planner, financial manager, financial examiner, financial
analyst, financial advisor, investment banker and corporate manager.

Furthermore, studying
financial management will also help those who starting their own business. It
improves interpersonal skills and help develop better teamwork and
communication skills. It also has great job prospects, according to USA’s BLS
the demand for financial management career has increased 14% while financial
analysis and financial advising has increased by 23% and 32% respectively. They
are offered higher salary packages and sustainable career growth and job
security. (LSBF Blog Staff, 2018)

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