Functions of financial manager
The finance function is one of the major parts of a business organization, which involves the permanent, and continuous process of the business concern. Finance is one of the interrelated functions which deal with personal function, marketing function, production function, and research and development activities of the business concern. At present, every business concern concentrates more on the field of finance because it is a very emerging part that reflects the entire operational and profitability position of the concern. Deciding the proper financial function is the essential and ultimate goal of the business organization.
Financial management is one of
the important role players in the field of the finance function. He must have
entire knowledge in the area of accounting, finance, economics, and management.
His position is critical and analytical to solve various problems related to
finance. A person who deals finance related activities may be called a finance
manager.
The finance manager performs the following major functions.
1. Forecasting financial
requirements.
It is the primary function
of a financial manager. He is responsible to estimate the financial requirement
of the business concern. He should estimate, how much finance is required to
acquire fixed assets and forecast the amount needed for the work capital
requirements in the future.
2. Acquiring necessary capital.
After deciding on financial
requirements, the financial manager should concentrate on how the finance is
mobilized and where it will be available. It is also highly critical in nature.
3. Investment decision.
The finance manager must
carefully select the best investment alternatives and consider the responsible and
stable return from the investment. He must be well versed in the field of
capital budgeting. The finance manager must concentrate on principles of
safety, liquidity, and profitability while investing capital.
4. Cash management.
Present days cash management
plays a major role in the area of finance because proper cash management is not
only essential for the effective utilization of cash but it also helps to meet the
short time liquidity position of the concern.
5. Interrelation with another
department.
The finance manager deals with
various functional departments such as marketing, production, personnel,
system, research, and development, etc. finance manager should have fine
knowledge not only of finance related but also be well versed in other areas, he must
maintain a good relationship with all the functional departments of the
business organization.