This is an extremely delicate subject, after all, many companies today end up breaking for not knowing what financial management is and how to put this concept into practice! They buy more than they sell, they do not analyze their cash flow, they do not have an idea if they are closing in the negative (loss) or in the positive (profit) and are often deceived by indicators that do not represent the real financial plan situation of the company. But rest assured, if you identified yourself in the phrases above, it’s time to solve this problem! In this article you will understand what it is, how it works, the main challenges and some essential financial management tips that will change the direction of your organization or agency.
Many problems of financial future can be solved with good planning and decision of financial management. See in this article how to position yourself to financial control in your business. The financial management course enables you can do the financial analysis and financial control of the activities of your company. Thus, it will be possible to make increasingly accurate financial decision and, consequently, maximize financial reports. This article has also the useful tips for finance manager.
When you understand what financial management involves, you will have the autonomy to make your company’s cash flow, as well as financial control on cash and inventory checking. The financial management encompasses all activities related to the control of the company’s financial resources, in order to ensure that the business society has enough budgeting for maintenance, investment decision through business owner and its own growth. Through adequate records and good monitoring by the finance manager, it is possible to obtain information that contributes by business owner to business planning, and to the optimization of financial goals and decision making as a whole.
IMPORTANCE OF FINANCIAL MANAGEMENT
The management Financial is an extremely important issue for any company, regardless of their size or line of business. This is because it allows the correct management of financial resources, which enables the strengthening of financial performance through financial decision of the business organization agency and, consequently, provides for its growth and the possibility of making new investment. In addition to this characteristic, another important factor linked to the health of the financial decision in business is that financial management, when done well, allows the reduction of unnecessary expenses and a correct allocation of resources, which strongly impacts financial reports. Thus, the more efficient and active the management, the greater the quality and financial goals achieved by the business. Learn also about the Financial Health of a business.
HOW FINANCIAL MANAGEMENT WORK?
The answer may vary slightly according to the company’s profile and the market served. However, some rules and tips are general and can be applied to any business model. For this reason, we have prepared some tips based on strategies that are used by all companies, regardless of their size or industry.
Make a plan
Implement a budget
Use financial instruments
Important financial management actions
Based on these three bases, financial plan or management also goes through numerous other important actions, such as:
Efficient control of the company’s cash flow budget;
The active and energetic management of budget payments and collections;
Constant monitoring and management of working capital ;
Control of the issuance and organization of invoices;
The periodic calculation of financial reports;
Periodic control of results.
HOW CAN TECHNOLOGY HELP?
Technology is an ally in the optimization, organization and efficiency of any company, be it a marketplace company, or simply a neighborhood trade. The using technology to the benefit of the company will only generate profit for the financial manager and his team of employees. Today, it is possible to find numerous solutions on the market, with systems that organize information on portfolio management, tasks and even payments. The implementation of platforms will reduce delinquency, since it will automate tasks such as generating collections and communicating with customers.
HOW FINANCIAL GOALS AND RESULTS ANALYZED CONSTANTLY
Financial management is not a closed process that has a beginning, middle and end. Infact results analysis is part of process that help you to change certain attitudes and adopt new measures, aiming at better results in the financial future.
AVOID FINANCIAL MANAGEMENT MISTAKES
There are many processes and actions linked to good management. We list here some situations that happen frequently with financial managers, mainly due to lack of knowledge and experience in the area. Check out what these errors are. Lack of knowledge about operations
Absence of financial performance analysis;
Neglecting to realize cash flow;
Lack of inventory control;
Poor management of working capital;
Lack of organization of tax and accounting documents;
Mix company accounts with personal accounting;
Absence of financial management accounting system;
Effects of poor financial accounting and financial management;
All the errors mentioned above have a direct impact on the company’s results. The financial planning sector is linked to obtaining, using and controlling financial resources, that is, its actions are reflected in the entire process. To achieve good results, it is necessary to establish administrative routines and policies, investment in innovation and updating and always be following what happens in the market through decision making.
INADEQUATE FINANCIAL MANAGEMENT
When financial management is done inappropriately, it can cause several problems for the business organization and agency, including:
Lack of knowledge about the company’s equity valuation, which may render the business unfeasible;
Lack of control over the company’s working capital, which may also make activities unfeasible;
absence of information on cash balance sheet, inventory, amounts of accounts payable and receivable through accountant, among other important information for the preparation of the company’s strategic and financial planning, which can put it in a position of debtor;
Error in the calculation of the sale price, which can generate financial losses for the company, For this risk management is necessary;
The absence of information on the withdrawal of pro-labour, which can generate a liability for the business. Some companies, especially small ones, find it difficult to carry out the strategic financial management of their businesses. The best option is always to hire a financial manager with training and experience focused on the financial accounting market. Thus, investment decision in hiring a professional is always the most recommended. As you can see throughout this guide, strategic financial management is essential for the financial performance of the organization and development of strategies aimed at the company’s progress.
Among the most relevant points of efficient investment decision management, pay attention to your cash, financial control, prepare and respect the budgeting, have the support of a professional with experience in strategic financial management through financial manager. With organization, innovation and planning, it is possible to go far! Put our tips into practice and guarantee a promising financial future for your business budgeting.