Every business needs finance for its growth. Sufficient funds are necessary even for starting a new business. Therefore, a finance expert needs to ensure sound financial management for the entire life of a business. The businesses need to hire finance professionals to manage the funds, regulate as required, comply with established procedures, and monitor spending at every stage of the business.
Companies that mismanage funds are either likely to post lower growth, report losses, or eventually close. Businesses can hire expert finance managers from reputed companies such as Joseph Stone Capital to better manage their finances and enjoy robust growth.
Financial management is the core business function
It is the business function that deals with parking available financial resources for improved returns and ensuring the success of any company. The finance experts engage in planning, organizing, and controlling all the transactions in a business. They are also responsible for sourcing funds either from initial investment, public issue, venture funding, debt funding, or any other source. Finance professionals are engaged in optimizing the utilization of funds, promoting financial stability, and helping the business achieve growth.
Why do you need to manage finances?
The finance professionals of an organization are tasked with framing the objectives and policies and preparing and implementing the procedures. They will also ensure the proper allocation of funds to the respective business functions to ensure growth. Therefore, a financial expert needs to ensure sufficient availability of funds, financial stability by balancing income and expenses, and a higher ROI. The financial professionals are responsible for creating and implementing business growth plans, apart from supporting expansion. In addition, the financial expert-sourced from Joseph Stone Capital protects your business against uncertainties in the market by ensuring buffer funds.
Scope of financial management
The main principle behind financial management is that it must safeguard the financial interests of shareholders and investors and promote the growth of the business. The financial experts are also responsible for improving ROI, which creates more wealth for all investors and shareholders.
Objectives
Assess the needs of capital: The financial manager is responsible for evaluating marketing costs, fixed and current asset costs, human resources costs, long-term operations, and the need for maintaining buffer capital. You need to estimate the long-term and short-term financial requirements.
Capital Structure: It allows making decisions like the debt-to-equity ratio in the long and short term.
Create financial policies: The financial manager needs to create efficient financial policies that govern borrowing and lending processes, cash control, etc.
Optimal utilization of resources: Financial managers need to navigate complex scenarios by optimally utilizing the finances. It saves financial resources and helps improve ROI.
Responsibilities of financial managers and advisers
Financial advisors and managers need to perform business functions like fund raising, fund allocation, profit planning, and understanding capital markets. The success and growth of any business depend on the availability of sufficient funds, a good market reputation, confidentiality, and liquidity. Finance managers need to maintain a healthy balance sheet by raising funds either through debt financing or equity financing in the event of insufficient internal accruals.