financial management
Financial management is the implementation of the organization, planning, control, and direction of all financial activities of an entity, and financial management is defined as an activity that depends on the financial planning used in business; In order to manage and control it. Other definitions of financial management are management that depends on the application of administrative principles, and is keen to collect and use money in a profitable manner, as well as plans for future activities, and controls all applications based on cost accounting and financial accounting.
Financial Director
The financial manager is responsible for all the financial affairs and business of an entity, and the financial manager is defined as a person who follows up on the company’s financial operations, and is concerned with preparing financial reports, following up on investment activities, and setting plans and strategies that contribute to achieving the company’s goals long-term finance.
How does a person become a financial manager?
The financial manager contributes to the development of financial management in various institutions, whether in the public or private sectors, and many individuals seek to work in the field of financial management, but in order for a person to become a financial manager, he must implement a set of procedures, which are:
Obtaining a scientific degree: Obtaining a bachelor’s and master’s degrees or one of them in the following fields: finance (finance), business administration, accounting, or any other disciplines that depend on studying business or management, and often the finance major in university studies covers all knowledge Related to financial planning, evaluating investment portfolios, and studying securities. Other disciplines such as accounting and business administration are also interested in teaching similar topics, such as the principles of economics. Employers prefer financial managers with advanced education; Where obtaining a postgraduate degree contributes to increasing job opportunities and improving career development, examples of postgraduate degrees are a master's degree in finance, economics or business administration.
Obtaining work experience: It is one of the necessary and important matters for the financial manager; Where his usual career begins with working in positions related to financial management, such as financial analysis and accounting, and companies usually look for financial managers with the appropriate experience; Especially related to business management and financial finance.
Acquisition of professional certificates: The financial manager obtains certificates that represent his level of competence, and the most important of these certificates is the certificate of a financial analyst; It is denoted by the acronym (CFA).
Excellence in appropriate skills: It is a set of basic skills that must be distinguished by the financial manager, and the most important of these skills are critical and analytical thinking, application of oral and written communication, possession of advanced skills in mathematics, and the ability to solve problems in the work environment.
Duties of the financial manager
The work of the financial manager in various companies depends on the implementation of a set of tasks and responsibilities, namely:
Ensure the provision and interpretation of financial information.
Monitor all cash flows, contribute to forecasting future trends, analyze changes and provide advice.
Preparing long-term strategic operation plans.
Report the influences affecting the nature of work performance.
Interest in studying market trends and analyzing competing establishments.
Ensure the development and improvement of the mechanisms applied in the financial management; This contributes to reducing risks.
Pursue appropriate opportunities to reduce financial costs.
Interest in managing financial accounting systems.
Communicate with all auditors; In order to monitor the annual financial position of the company.
Developing and improving external relations based on activating the role of communications with bankers and financial auditors.
Managing the financial budget and submitting appropriate financial reports.
search for new sources of financial financing; In order to facilitate the payment of debts owed by the company.
Follow up on all changes related to legislation and financial regulations.
Financial management objectives
The financial management seeks to achieve many beneficial goals for owners, managers, employees, and customers of various establishments, and the following is information on the most important of these goals:
Increase profits: is to raise the value of the company's revenues and profits; by seeking to increase its sales or other activities; By using the most successful plans and opportunities available to increase profits.
Reducing costs: is the reliance on equity and capital funds; In order to implement all appropriate steps to reduce and reduce the costs of the company's capital.
Reducing risk: It is the role of financial management in reducing risk when its percentage increases and increases; Because it may affect the existence and continuity of the company.
Raising the long-term value of the company: is the increase in the value of the company in the long run; By making more profits in the shortest time.
Financial Management Jobs
The work of the financial management in various companies is related to the implementation of a number of functions, including:
Liquidity : It is an indicator of the amount of money that a firm owns and uses to pay its short-term obligations. It is possible to ascertain the nature of liquidity based on three considerations:
Forecasting cash flows: It is the achievement of parity between incoming and outgoing cash flows; In order to reach the liquidity targets.
Increase money: is to support raising funds and identifying needs through the financial manager.
Managing the internal flows of funds: is to maintain financial accounts in more than one bank; In order to maintain a high degree of liquidity.
Profitability : is the economic situation associated with achieving financial profits, when applying profitability, the following matters must be taken into account:
Pricing: It is one of the important policies in companies; It has importance associated with determining the level of sales in the company.
Anticipating future profits: It is the prediction and evaluation of the estimated profits; With the aim of strengthening the company's presence, and ensuring a good level of profit.
Measurement of costs of capital: is the method used to measure the cost of capital; Because the company's profit is linked with it, and each funding source has its own cost of capital.
Management : is the duty of financial management to maintain the sources of assets; Because it plays an important role in financial management; The financial manager must ensure that the sources of assets are available to run the company on a permanent basis.