Financial management - these are the techniques, tools and methods that are used in the enterprise in order to increase profitability and minimize the risks of insolvency. He pursues one main goal - to get the maximum possible benefit from the activities of the organization, acting in the interests of the owners.
The main functions of financial management:
1) internal finance planning;
2) analysis and diagnosis of the financial condition of the organization;
3) investment management;
4) regulation of financial risks ;
5) other.
Financial management is a complex process, which includes procedures of different levels of responsibility and complexity. At the first level, financial decisions are made on the prospective development of the current activities of the enterprise, sources of financing are attracted , and a certain financial policy is being pursued. These tasks are considered the most difficult and responsible. Top managers are involved in their decision, and delegation takes place only partially.
At the second level, various financial calculations are performed, financial documents are drawn up, reports are prepared. These are simpler tasks that are solved by employees of financial, accounting, economic services, and some of them are entrusted to the departments of the enterprise.
Financial management is the implementation of the strategic tasks of an enterprise with the implementation of appropriate financial policies. At the moment, the most important task of the organization is maximizing the price of the company. Considering the theoretical foundations of financial management, we should dwell on the financial policy of the enterprise. It includes the following elements:
1) maintaining accounting policies;
2) implementation of credit policy;
3) the creation of cost management methods, cost classification and calculation of the share of fixed costs in the cost;
4) conducting tax policy, as well as tax planning;
5) implementation of investment policy.
The financial system is complex, dynamic and open. Its complexity is that it is formed by heterogeneous constituent elements with the presence of diverse relationships between them. The dynamism is due to its constant development and change in the size of financial resources, fluctuating demand and supply for capital. And due to the exchange of information of the financial system with the external environment, it can be called open.
International financial management includes conducting serious financial statements, where responsibility for execution rests with the management of the enterprise. Results, profits and losses are considered, and changes in the financial condition of the enterprise are calculated. The information that should be published is checked by auditors.
So, financial management is the art of managing the movement of finances, as well as controlling the financial relations that arise between enterprises in the process of moving these funds. He develops the goals of managing financial resources and exercises influence on them with the help of various levers and methods of the financial mechanism in order to achieve the goal.