As we, all know a financial manager is the quintessential part of every business organization. They are the behind scene players who keep the act running successfully without a glitch, year after year. Often they are the ones who have to keep the team together and get them going. Arnon Dror Portland says, It’s a crucial influential with governs to critical areas of business development – finance and management. That is managing and prioritizing both funds and people – the 2 essential things that keep the business running. Mr. Arnon is a professional in accounting and financial management.
It looks so simple from the outside but hardly any of us know the actual nature of the job at hand. Contrary to popular belief, it’s a much tiresome job and requires fine skill and integrity of character. The work involved as varied as it gets. From tax filling, insurance sorting to financial reports to making creditors and investors to managing and distributing the assets – all comes under their purview. So here we are demarcating some of the chief functions of financial managers.
The primary function of financial managers is to manage the funds at hand and prioritize all the work. They need to tally all the expenditures, investments, costs, revenues, salaries, debts, insurance, taxes etc and maintain a steady in-flow of the cash. Accordingly, they have to make a finance report by analyzing every situation and forecast the future economic condition based on that. For this, they have to keep up with market trends, the company’s role and potential in the market and other such external factors, which might influence the financial condition of the organization in the near future. So, this is a crucial role which has to be done regularly in order to remain viable in the market. In fact, this is one role that differentiates a financial manager’s job from that of an accountant.
Next line to managing funds is the necessity of raising funds. A finance manager does not just prioritize and control finance but they also come up with new ideas to raise funds. A company constantly needs to improvise and find new ways to cut down expenditure and costs. As per Arnon Dror Portland, the financial managers maintain a steady balance of equity and debt keeping in mind both long-term and short-term scenarios. They are the ones who will advise in case of any imbalance in equity-debt ratio and will approach creditors and investors accordingly.
Estimating the cost and utilizing the funds
Last but not the least is to estimate future costs and expenditure and utilize funds based on this. Financial managers have to act like a good public official and foresee the future. They are the far-sighted ones, visualizing things way ahead of time and adjusting accordingly. Thus, they use their analyzing skill properly and read between the lines of market scenario and world economic condition. This empowers them with an insight of the rising costs or changes in revenues and expenditure both in the long term and the short term. Hence, they will plan and allocate the use of funds according to situational demand, making most of the change in the market dynamics.