In a world as globalized as we live in, it is vital for companies to conduct good financial management and a good administration of their finances. But what exactly is this activity and what is it for? What constitutes as sound financial management of a company?
There are many notes on financial management in the network; but in reality, it is very simple, because, in theory, the financial and accounting management is based on the effective administration of the resources that the organization has. Thus, the company can manage its expenses and income in the most appropriate way so that everything works correctly.
The person responsible for this type of management is the financial manager. And within the financial organization chart of the company, he is responsible for planning and organizing the financial strategy of the company but also for controlling the financial operations that are carried out in the company. Therefore, the role of the financial manager is vital for the health of any organization, since it has to take into account both the past, the present and the future of the organization and the market. Only then can you avoid past mistakes, evaluate future risks or opportunities and analyze the current economic-financial situation to achieve higher levels of profitability and benefits.
Control of the financial flow within the company must go through strong financial management in order to better understand the situation of the latter in relation to charges and expenses. Managing finances requires a certain level of knowledge, but like any field of study, account management also has its basics that anyone can learn. Good financial management must go through the use of financial tools, the analysis of the accounts and the procedure of budget preparation. So many important steps to master the basics of financial management.
The essential of powerful financial management is in maintaining the specifications, including the fundamental principles of the accounting in general, the organization of the accounts, the accounting maneuvers like the drawing up of the balance sheet. The main purpose of this document is to take stock of the company’s old and current financial situation, to collect the necessary information before making a decision, to meet the requirements for payments to the various government authorities, to anticipate the possible problems encountered by the company. As the main tool necessary for good financial management, the specifications are also supported by other financial documents, the most common of which are: the sales and expenditure journal, the budget,
Now that all the financial tools are at hand, it is now time to conduct a financial analysis. The goal is to extract the company’s financial statements in an organized manner, then interpret them and extract key information about the overall health of the company’s finances, as well as its growth potential.
Carrying out this kind of diagnosis is not necessarily accessible to everyone, because you have to be able to read and interpret both an operating account and a financial statement, in addition to the other crucial information that helps in the assessment of the economic health of the company. However, with books entirely dedicated to financial analysis, it becomes easier to access knowledge.
The budget preparation procedure
Following a careful and in-depth financial analysis of the financial health of the company, the third step of good financial management consists of developing a budget, which groups and centralizes all of the company’s accounts during a predefined period. Under the direction of the management controller, budget development aims to determine a forecast of sales and expenses to assess the efficiency of the business.
However, he does not work alone in this context. In fact, all the department heads come to contribute to this task and guarantee consistent activity and expense forecasts. This data will then be used to estimate the quantities of services to be produced, the expenses to be covered, as well as the means necessary for the implementation of the strategy.
The financial management of an organization consists of managing and being accountable for the funds spent in accordance with the objectives of the board of directors. These include:
generally manage the resources of the organization, and specifically manage financial risks;
approve the budget;
to ask the necessary questions.
Within the board of directors, the directors:
share equally the responsibility for carrying out the agency’s mandate;
share responsibility for the prudent management of the organization’s finances;
must understand the financial information presented;
have to ask questions if they don’t understand something;
may request clarification;
maybe held responsible if they fail to fulfill their individual responsibilities.
Advantages of Financial Outsourcing
Financial outsourcing allows the increase in efficiency and productivity of your company
In recent decades we have seen how the advantages of outsourcing were established as a business strategy. Its potential impact on the results of a project is indisputable, the outsourcing of certain specific processes has proven to be a tactic that increases the efficiency and productivity of companies. That is why outsourcing is increasingly used as a common practice, there are many advantages offered by financial outsourcing for SMEs.
Other advantages of financial outsourcing are:
Concentrate efforts on the key activities of your business.
Ensure business continuity by defining processes with clarity and previously unknown procedures
Reduce service costs by facilitating financial planning and budgets
Make better business decisions thanks to the information and specific experience of the financial advisor
Improve cash flow and reduce financing expenses
Financial solutions for companies
Wealth Press is a union of professionals with extensive experience in providing financial solutions to companies. Their goal is to offer quality financial advice and guarantee the resources you need at different stages of your company’s life. In this way, you can execute with excellence the main processes of your business and make it grow. Based on personalized analysis, WealthPress, provides each company with the most appropriate solution for the current situation of the company, taking into account both its future projections and the global financial situation.
Advantages of working with WealthPress:
Extensive experience in the financial sector
Extensive knowledge of the credit and capital market
Solutions for financing your company
Access to the best market conditions, both in terms of costs and guarantees of operations.
An extensive network of collaborations with different financial agents.