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The financial aspect is an important pillar of a company. The company cannot operate without capital. In addition, good financial management is required to avoid problems and to use funds effectively. These things relate to the well-known term, namely financial management.

But what are the benefits and job prospects that can be achieved by understanding the concept? Check out the full review below.

understand financial management

Simply put, financial management encompasses all activities related to the management of funds in a company. This financial management series begins with where the source of income comes from and how the funds are used by the company.


Who has the right to regulate and manage the finances?

Each company’s policy is different, but usually, this process is handled by a finance manager. The position of finance manager acts as manager, supervisor, and regulator of the use of funds in a company to avoid the risk of bad things related to finance.


financial management activities

So what are the specific financial management activities? This is the full review.


  1. Receive corporate funds

One type of financial management activity is to obtain sources of business funding so that business operations can continue. The source of funding in question can be in the form of equity or debt.

Capital in a business is divided into two categories namely investment and savings. While the debt is usually in the form of a loan from a bank or a loan to a supplier for raw materials. The two sources of funding can be internal or external.


  1. Use of Company Funds

The use of company funds means that existing funds are used for various activities and company needs. Its use can be in the form of asset purchases, financing of operational costs, or investment processes.


  1. Manage wealth

After receiving the assets from the issued funds, the assets are not left alone. Proper management must take place for the acquired assets to generate profits and function effectively for the company.


financial management function

The function of financial management is to maintain good management of company funds. Related to this feature, there are five other features that you need to know.


  1. Planning (Planning)

This planning function includes planning the company’s cash inflows and outflows. Additionally, discussing profit and loss can also be an aspect of this role.


  1. Use of funds (budgeting)

Budgeting is a function that refers to the process of allocating funds for the needs of the business. This allows the organization to achieve maximum results with the most efficient resource allocation.


  1. Control

Controlling in financial management is the process of controlling and evaluating the cash flows in the company. For a finance manager to improve and improve the finances of the company.


  1. Examination (revision)

The auditing function is where the company’s financial auditing process takes place. The finance manager can see whether irregularities occur or not.


  1. Report (Report)

Reporting is a function related to reporting on the financial condition of the company.


Scope of financial management

Now that you know what the activities and functions of this management are, it is now time to learn more about its scope.

funding decisions

Funding decisions in this management process include activities related to raising funds for the business from various sources. Determining the source depends on deciding the type of source, the funding period, the level of costs, and the payback period.


investment decision

As the name suggests, this scope relates to the company’s investment policy. It can be in the form of tangible assets such as buildings, land, and others, or it can also be in the form of financial assets such as stocks and bank deposits.


dividend decision

In addition, there is a dividend decision, which includes a decision to share profits with shareholders. The amount can be fixed immediately or withheld due to company expansion and change needs.


Financial management goals

It should be noted that the purpose of financial management is not just limited to managing funds within the company. The following points are also the goals in the implementation of this management process.


Maximizing Company Assets

Company assets such as fixed and financial assets are useless if they are only owned without being optimally managed. Coupled with the budgeting function and the use of good management, the company’s wealth will bring maximum results.


Maintain the company’s cash flow

Have you ever heard the saying that the stakes are bigger than the stakes? One of the goals of financial management is to avoid spending over revenue by maintaining and monitoring the company’s cash flow.


Reducing the operational risk of the company

Financial managers will be able to reduce risks that can arise with good strategy and management. Because all financial decisions made affect the business risks of the company at all times.


Principles of financial management

When implementing a fund management process, several principles of financial management must be adhered to.


  1. Transparency

The company should open up to the authorities as much as possible in the money management process. The principle of transparency in financial management can be demonstrated by providing complete and correct financial information without any manipulation.


  1. Accountability

Regarding transparency, the principle of accountability must also be applied. With accountability, all information provided must be accountable. This affects the presence or absence of financial irregularities in the enterprise.


  1. Consistency

The company’s fund management system is to be implemented consistently. This also applies to the emergence of operational risks due to system changes in financial management.


Career prospects in financial management

Financial management ability does not make it impossible for an individual to find and build good financial management career prospects.


  1. Financial manager

In general, financial management career prospects are the responsibility of a financial manager. The finance manager profession is in dire need of skills and expertise in this field. Since the responsibility is the survival of the company itself, the finance manager’s job is considered quite heavy. Therefore, this profession is usually considered a high position compared to other employees of the company.


  1. Entrepreneur

Of course, as an entrepreneur, you don’t want your business to thrive without achieving maximum results. In this way, good managerial skills can be a way of running the company’s operations effectively and efficiently.


  1. Accountant

An accountant is responsible for preparing a financial report for the company, e.g. B. a tax report. In addition, accountants can also evaluate the budget to improve the company’s finances or make recommendations to increase sales. This profession is slightly different from a financial manager. Where the financial manager is more involved in allocating funds to asset management, an accountant typically only has to contend with financial reports.


This was our review of how to manage finances in the company. By doing this, you can reduce the likelihood of problems within the business so the business can continue to grow.

But apart from financial management, other things should not escape the attention of businessmen to develop their business. What is that? The answer is economic research. Through this research, you can gain various insights that can be incorporated into business strategies.

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