By financial management is meant a combination of certain methods and techniques of targeted impact that are used to achieve a specific result. This is a very multifaceted topic that is difficult to fully consider in one article. After all, we can talk about financial management of the enterprise, personal savings, public funds, and also take into account many additional points, such as: system, methods, analysis, efficiency and the process itself.
general information
Initially, it is necessary to deal with what is of interest to us:
- Management object. These are various types of financial relations that are associated with the formation of cash incomes, the accumulation of funds and their subsequent use by individuals, business entities and the state.
- The subject of management. These are organizational structures and individuals who manage money.
- The financial apparatus. The set of organizational structures that manage money.
Together, they allow you to create a system that allows for high-quality and effective financial management.
Things to Know
Good theoretical training minimizes the number of practical problems. In monetary affairs, there are several important points that will allow you to build a good financial management system. In short, this is planning, forecasting, operational management and control. What are they? In short, then:
- Financial forecasting. Presupposes the availability of planning. It consists in evaluating a certain set of options and choosing the best from them. It studies the issues of cash flow at the micro and macro levels.
- Financial planning. This is a substantiation process built on scientific principles. In this case, it implies the development of plans for a certain period in which emerging relationships and movements of financial resources are considered. It is used to specify forecasts, determine indicators, interconnect tasks, and also select methods that will be applied to achieve the goal.
- Operational management. It is a set of measures that is developed on the basis of an analysis of the current situation. It pursues the goal of obtaining maximum effect with a minimum of costs.
- Control. It is used as a control element in the planning and operational management processes. It is necessary to compare the actual results with the planned ones and to identify reserves for the growth of the volume of resources and the efficiency of their use.
Let’s say a word about principles
The financial management process should be based on certain basic foundations that give all actions orderliness and structure. As such, there are principles — the basic requirements that are put forward to the structures governing the money supply. They come down to the following statements:
- Leadership always depends on the ultimate goal pursued.
- It should correspond to the interests of the individual (owner, team, company, society, state).
- When achieving the goal, it is necessary to take into account the influence of objective economic laws.
- In the process of work, one should take into account the real financial and economic conditions in the country of activity and beyond its borders.
About methods and tasks
The main goal that is being pursued is to achieve financial stability. Therefore, the tasks and methods of financial management vary depending on who we are talking about. If the state is one thing. The position of an individual requires a different approach. So, the state has to solve such problems:
- Ensure macroeconomic balance.
- Reduce government debt.
- To achieve a balanced (surplus) budget.
- To ensure the stability of the national currency.
For this, the following financial methods are used:
- Analysis.
- Planning and forecasting.
- Mobilization of financial resources.
- Control.
- Information and legal support of subjects of financial relations.
- Regulation.
Public finance management has been thoroughly studied, therefore, if you want and due diligence to ensure the efficient use of funds is not a problem. And what about other cases?
What else can be said about the state?
First of all, you need to remember that it works for people. And his goal is their comfort, and not making the maximum possible profit. This must be taken into account during the implementation of financial management. But this does not mean that the state cannot take part in projects that promise profit. But the main thing in this, as a rule, is the social component - that is, what the implemented idea will be useful for local residents or the whole society.
What does enterprise financial management look like?
Imagine that there is a commercial structure of the middle hand. In this case, managerial functions are assigned to the financial department, to which feasible assistance is provided by accounting and auditors. At the same time, the data received is transferred to the senior management, which makes crucial decisions (for the enterprise). At the same time, attention is paid to both current information and historical data. After all, it is necessary not only to monitor the flows of funds that are going now, but also to control the actions taken for various violations (embezzlement and so on). An important role in this process is played by the analysis of financial management. It should be understood that all the information that is taken into account for decision-making is based on primary accounting documents. Therefore, before you do something on its basis, you should analyze the data for inaccuracies, discrepancies and other possible deviations that will allow you to judge the presence of certain problems or hiding information.
The importance of good governance for the enterprise
The financial sector is a reflection of the success of the enterprise. Even small fluctuations can indicate the presence of significant problems (both now and in the not very distant future). And as you know, the best crisis is one that has been successfully prevented even before it occurs. Moreover, based on the results of the enterprise’s activities, conclusions can be drawn not only about its position, but also about the situation in the markets. If the financial service manages to notice a storm approaching in a timely manner, then it has time to prepare to respond to it, which potentially allows it to gain an advantage over other companies. In this case, a special role is played by methods for assessing the situation developed within the framework of economic science, for the use of which it is necessary to take care of the availability of educated and qualified personnel. Often this is quite expensive, but losses are usually much more expensive.
And the most relevant is personal finance.
Which of us did not dream of having a good and successful life? But it is not given in vain. To get it, you have to work hard, including on yourself. One of the most important points along the way is personal finance management. In general, this process looks easy. The greatest problem for many people is self-discipline and organization. It is not enough to know something - it is also necessary to act. In short, personal finance management is based on fixing all income and expenses, as well as finding opportunities to save money on unimportant items in order to redirect flows to higher priority goals. And again, the weakest point for most people who are thinking about rationalizing their lives is self-discipline and organization. Whatever a person decides, no matter what tools he uses, without these two points the whole thing can go to the bottom. Therefore, managing personal finances requires determination and discipline. And these qualities cannot be obtained from under a stick.
How to cope with finances?
The main goal pursued is to ensure higher safety and targeted use of funds for priority and important tasks. What exactly is the second thing. For example, to save money for a house, own business, study. First of all, it is necessary to solve the question of how exactly all this will be organized. You can start a notebook where funds will be recorded at the time of the start of accounting, income and expenses. Or, in accordance with the spirit of the times, get a thematic program on a smartphone, tablet or computer. Since the second option is more convenient, it must be considered carefully. Separately, it is necessary to work on developing the habit of entering information about all changes and decisions made. For example, in the evening, before going to bed.
Using personal finance accounting software
First of all, it is necessary to mention the fact of automation. Many actions do not need to be performed independently, since everything is already considered by the program. For example, the sum of all income or expenses. In addition, there is often a functional presentation of data in graphical form, which greatly simplifies the perception of information, compared with numbers. The fact that you can easily keep records of even the smallest amounts of money also plays a role in the effectiveness of financial management, because the device’s memory requires less than paper to display all the information. In addition, navigation is simplified, and if necessary, you can get data even for past years, without putting significant effort and without wasting your time. Although you should not forget that there is a need for electricity for the operation of the device. Therefore, it is better to opt for software that works in stand-alone technology (laptops, tablets, smartphones). At first, due to the unusualness, the speed of work may be relatively small, but gradually everyone will be able to appreciate that financial management using a computerized approach is very convenient.
