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Posts Tagged ‘The role’

The financial manager plays a crucial role in the operation and success of companies. The role of the financier is from the budgeting, forecasting and cash management, credit management to the investment analysis and fundraisers.

Since that most business decisions are measured in financial terms, the role of financial manager in the operation of the enterprises is of vital importance, as well as all those areas that constitute the business organization, accounting, manufacturing, market, personnel, research and others, require a minimum knowledge of the financial management function.

The importance of the finance function depends largely on the size of the company. In small companies, the finance function is usually entrusted to the accounting department, but as the business grows, you must create a special department to work the financial area.

The financial manager must master the basics of both economics and accounting. You must know the prevailing economic framework, the changing levels of economic activity and changes in policy, for that referred to some.

There are two basic differences between finance and accounting: One is the treatment given to the funds, and the other decisions. The counter devotes his attention mainly to the method of accumulation, collection and reporting, the financial manager for its part, focuses on cash flow methods and decision-making.

The role of financial manager is growing steadily due to the need for companies to be more competitive financially, which leads them to seek advice on financial professionals to achieve better economic performance and creating value in the organization.

It is said that the financial objective of maximizing the value of the company, which should focus on the main functions of the organization’s key financial, investment, financing and dividend decisions.

But the question is how financial statements and indicators are efficient in generating critical information for the organization?

You could say that while financial indicators are useful, they require the proper interpretation and application by the financier in order to obtain information that can be used in decision-making, and to use new financial tools such as global indicators that further complement the source of information and fail to take action in pursuit of economic growth in the company.

The global market should question the future financial manager on the important role it plays in business and the business environment as well as the need to anticipate events that may affect the economic stability of the organization, in the case of financial projections , the financier must calculate the cost may be an erroneous projection in their sales or lack of liquidity in the organization to cover its cash disbursements and some major tax changes, fiscal and monetary might divert completely the projection made, it is important the financial watch out for the global economy and determine how the company can be affected to the changes in international markets and the effects on exchange rates, inflation and interest rates. Read the rest of this entry »