Monday, 7 August 2017
Financial management is more than just keeping accounting records. Financial management is an important part of organizational management and can not be seen as a separate task and left alone.
Financial management also involves planning, organizing, controlling, and monitoring financial resources to achieve organizational goals. You can only get effective financial management if you have good organizational planning as well.
Planning in this context means having goals, developing and evaluating approved policies, strategies, tactics and actions to achieve organizational goals.
Good financial management will involve you on long-term strategy planning and short-term operating planning. This financial planning should be part of the ongoing planning process.
The advantages of sound financial management
Good financial management will help your organization to- Use resources effectively and efficiently
- Achieving goals and fulfilling commitments to stakeholders
- Be more accountable to investors and other stakeholders
- Gain the respect and trust of various institutions, partners and beneficiaries,
- Benefit in competition
- Preparing for financial sustainability in the long term
What can make financial management work well?
There are four components to making good financial management- Clear financial strategy
- Planning to generate income
- Financial management system
- Appropriate internal environment
Financial management system
There is no model of financial management system that is suitable for all organizations, but there are some basic things that must be considered in order to achieve good financial management practices. It will be helpful to identify certain principles when developing a financial management system. This can be a guide for you when making decisions
