Financial management is a wide field that specializes in the financial operations of an institution. In addition, it involves managing the finances of an organization. This is an important section in any organization or company as it ensures that the embezzlement of funds is minimized if not avoided. On the other hand, if an organization has a poor financial management system, then there are problems associated with it, such as overhead costs, which in most cases forces the organization to turn to much borrowing. Too much borrowing means that the company will be in too much debt.
Facts on financial management
In a deeper meaning, financial management refers to planning, organizing, directing and controlling the financial activities of an organization. This wide section can be divided into sub-categories that major on the main principles of the organization. Basically, these are the functions that the financial management system is set out to achieve. It covers up investment decisions, financial decisions and dividend decisions. When it comes to financial decisions, a lot of expertise and skills have to be exercised. This is because this is the channel through investors will be attracted to invest in the company. At the same time it looks up for investments in both the fixed and current assets of the company.
Under financial decisions, financial matters are of great concern. It looks into the sources of capital for the company that are greatly influenced by various elements, such as the period and the cost of financing. The third category entails the dividend decisions that focus on the net profit distribution. Part of the dividends are divided among shareholders, while another section has to be retained in the company. With all these functions, this clearly shows that if the company has a poor financial management, then the company will not run its operations as expected.
Additional information on this career
Financial management has been a great career and it has gained fame over the years. Many students have ventured into this career because of its great demand in all organizations. Moreover, it meets the following objectives to facilitate the proper running of the company. It ensures that there is an adequate and regular supply of finances to the areas of concern. Secondly, it ensures safety on investment in that it ensures that the investments of the company are made in areas that will be of great returns in order to make profits.
In addition, the system ensures that the funds are utilized optimally in order to reap the maximum profits possible. It beats logic to leave the funds idle, yet they can be utilized for the better good.
Conclusion on financial management
Financial management is a good career, but at the same it calls for a lot of skills. This means that one has to attain academic qualification in order to find this field enjoyable and manageable to work around. There are different institutions that offer this career’s certification, but one has to ensure that the certification is legalized.