Any company, whether or not it’s a small-town bakehouse or General Motors, wants cash to work. to create cash, it should initial pay money—on inventory and provides, instrumentality and facilities, and worker wages and salaries. Therefore, finance is essential to the success of all corporations. it should not be as visible as promoting or production, however management of a firm’s finances is simply the maximum amount a key to the firm’s success.
Financial management—the art and science of managing a firm’s cash in order that it will meet its goals—is not simply the responsibility of the finance department. All business choices have money consequences. Managers all told departments should work closely with money personnel. If you’re a sales representative, for instance, the company’s credit and assortment policies can have an effect on your ability to create sales. the pinnacle of the IT department can ought to justify any requests for brand spanking new laptop systems or worker laptops.
For example, a money manager can track day-after-day operational knowledge like money collections and disbursements to make sure that the corporate has enough money to satisfy its obligations. Over a extended time horizon, the manager can completely study whether or not and once the corporate ought to open a brand new producing facility. The manager also will counsel the foremost applicable thanks to finance the project, raise the funds, and so monitor the project’s implementation and operation.
Financial management is closely associated with accounting. In most companies, each square measureas are the responsibility of the vp of finance or business executive. however the accountant’s main operate is to gather and gift money knowledge. money managers use money statements and alternative data ready by accountants to create money choices. money managers target money flows, the inflows and outflows of money. They arrange and monitor the firm’s money flows to make sure that money is offered once required.