Translated from English, the term financial management means financial management of the organization. Financial management is a whole science of how to use own and borrowed funds from the outside more efficiently, how to get maximum profit with minimal risk, how to make an enterprise solvent, highly liquid, competitive and financially attractive. The current state of the enterprise and its future prospects largely depend on how accurately the goals and objectives of financial management are met.
The goals and objectives of financial management are closely intertwined. The fundamental goal of financial management within the framework of a particular enterprise is to ensure the fastest possible increase in the welfare of the owners and founders of the organization, both in the current and future periods.
To achieve the main goal, the following tasks must be implemented:
- based on the development strategy of a particular enterprise, provide it with the necessary financial sources;
- in the process of development of the enterprise to ensure its financial equilibrium or financial stability;
- maximize profits with a minimum level of financial risks;
- for the normal functioning of the settlement policy of the enterprise to optimize cash flow;
- in the context of the priority areas of the company to ensure the efficient use of banknotes and other financial resources. As you can see, the goals and objectives of financial management are mandatory and largely determine the success of the organization.
Financial management at the enterprise is implemented in the functions inherent in it. Functions and tasks of financial management have a pronounced relationship, because the tasks of financial management largely determine its functions. The main functions of financial management include:
- planning of finances at an enterprise is the planning of absolutely all incomes and expense items of cash equivalents to ensure the sustainable development of a particular enterprise. Depending on the size and scale of the enterprise’s activity, this function is given a different meaning;
- forecasting is the development and adjustment of changes in the financial condition of the enterprise as a whole and its various units. Forecasting can be carried out using expert assessment by transferring the past state of the enterprise to the future, as well as direct planning and anticipation of future changes;
- regulation is the impact on management, during which the state of financial stability and stability of the enterprise is achieved in the event of some deviations from the schedule. It includes all current measures to eliminate deviations from planned schedules, as well as planned tasks and fixed standards and norms;
- the control function is designed to reflect the state of the turnover of resources of the enterprise and provide control in the field of management decisions;
- the organizational function is designed to provide a systematic approach to the organization of cash flows. This function comes down to uniting the entire team that implements the financial program.
The functions, goals and objectives of financial management largely determine its essence, according to which financial management is a whole system of methods, actions and principles for the development and implementation of clear management decisions that are directly related to the process of formation, accumulation, distribution and use of enterprise financial resources.