I would say entire financial managment is interesting. If I want to quote one, I would say time value of money is a very simple and useful concept. It says the value of money u have today and u receive in future is not the same. Basically, value of money depends on the purchasing power it holds at the given point in time. If i want put is simply, time value of money is one of the reasons why we get interest on deposits and have to pay interest on borrowing. This concept can have a application in our routine financial decisions like what amount to spend and what amount to save from our income and on what spend now versus spend in future.

Financial management is probably one of the biggest aspects of the business as well. Without financial management, you wouldn't be able to begin running your business or even open it for that matter. But how important is financial management? So, just what is this type of financial management and why is it so important?

The first and most obvious importance of financial management is that it allows the individual in the organization to exercise financial control over their own company. Without the ability to organize the funds of an organization, it would be impossible to conduct all aspects of the business including the payment of employees, purchase of equipment and supplies, the paying of debts, and even for the operation of the business itself. If you have staff that doesn't know where their funds are going, then you could find yourself with some very serious problems within the company itself.

There are many other reasons as well for a person to wish to become a financial manager. This type of job can lead to a very varied career path within the construction industry. As a financial manager, the individual may be involved with many different things such as creating a risk analysis and risk management plans for the organization, as well as working closely with Finance and Accountants to provide advice on the best ways to manage finances. A financial manager is also likely to be involved in the areas of Investment, Management, and the Reporting of Financial Information to a variety of stakeholders. However, they must possess a wide understanding of all areas of finance in order for them to perform their duties in an effective and efficient manner.

So, just how is a financial manager able to contribute to the success of an organization? First of all, the manager has to be in a position to delegate tasks to various individuals or teams. In addition to that, the manager should know where and how to get an accurate analysis of the organization's financial situation at any given time. They need to be capable of forecasting the future of the organization and performing periodic evaluations of the health of its cash flows, assets, liabilities, revenues, and costs.

A financial manager should not only know how to perform these tasks, but they should also be proficient in dealing with a variety of people. This includes the CEO, CFO, and all of the other executives who may need to regularly visit the office on a daily basis. The role of a financial manager includes much more than just looking after the day-to-day running of an organization's financial affairs.

This type of role also requires the financial manager to possess some managerial skills. For example, a manager needs to be able to work effectively with a variety of people in an environment where they are all competently educated and capable of doing tasks in a manner that is effective for the particular organization. In addition, the manager needs to be able to communicate effectively and understand what is happening within the organization. However, most importantly, the financial manager must have the vision, so that he or she can identify opportunities and threats in a timely manner. In order for a financial manager to be able to provide leadership for the company, the manager must also be able to foster leadership in those within his or her organization who may have limited managerial skills.

The overall responsibility for the management of the day-to-day affairs of an organization falls on the shoulders of the financial manager. He or she is the organizer of the day-to-day processes that affect the organization. This includes budgeting, financial planning, cash flow analysis, allocation of resources, production and manufacturing issues, as well as business growth and expansion. It is the financial manager that organizes and directs the efforts of the other members of the organization to achieve their business objectives. He or she is responsible for providing all of the information and support needed to the rest of the organization to ensure that all of the objectives and plans are progressing as planned.

If you are in a position of leadership within your organization and are looking for ways to enhance the effectiveness of your financial management, consider talking to a financial advisor. They will be able to help you identify how your current financial management structures are working to your disadvantage, and how you can improve them so that you can meet your future goals and objectives more effectively. To learn more about what is the importance of financial management, contact an accredited financial advisor today.

Hey Surbhi,

The answer for your question can be an encyclopedia in itself as there are so many interesting concepts in the world of finance.

If I were to pick the most interesting concept, I would certainly say "Time value of money". This is such a simple yet powerful concept which any novice also can understand and at the same time the utility of this concept is also widespread.

You do not need to be an expert in finance to know that what Rs. 100 could buy 10 years ago it cannot buy the same today. I have heard m grandparents talking about this and so did my parents. Interestingly, none of them have ever attended a college.

This concept teaches us the meaning of the word inflation - a term which affects every soul in the world.

So for me it is always time value of money which has been the most interesting concept.

Happy Learning!

Financial Management is that managerial activity which is concerned with planning , organising,directing,amd controlling of the firm Financial resources.

Where to invest fund and what amount? i.e Investing decision

Where to raise funds amd what amount? i.e Financial decision

How much to pay by way of dividend ? i.e Dividend decision.

Advantages:-

1.Sufficient liquidity

2.Better finacial health

3.Profitability

4.Competitive advantages

Importance of financial management are :-

1. liquidity management
2. Out of cash
3. Helps in Decision - Making
4. Addition in the value of business
5. Helps in situation of cash crunches
6. Perfect Investment Plans
7. Good reputation of entity

Financial management is the process of managing a company's finances in such a way that it can be profitable while still adhering to regulations. This necessitates both a high-level strategy and on-the-ground implementation. Financial Management means:

• Planning,

• Organizing

• Directing,

• Controlling the financial activities such as procurement and utilization of funds of the enterprise.

Financial management is essentially the process of creating a business plan and also ensuring that all departments remain on track. Strong financial management allows the CFO to provide data that aids in the development of a long-term strategy, informs investment decisions, and provides insights into how to fund investments, liquidity, profitability, and more.

Financial decisions are extremely important while running a startup and you will be using fund money to run it, which leaves no room for mistakes.

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Financial management refers to the strategic planning, organising, directing, and controlling of financial undertakings in an organisation or an institute. It also includes applying management principles to the financial assets of an organisation, while also playing an important part in fiscal management. Take a look at the objectives involved:

• Maintaining enough supply of funds for the organisation;
• Ensuring shareholders of the organisation to get good returns on their investment;
• Optimum and efficient utilization of funds;
• Creating real and safe investment opportunities to invest in.

Financial management is also made up of certain elements. These include:

• Financial planning: This is the process of calculating the amount of capital that is required by an organisation and then determining its allocation. A financial plan includes certain key objectives, which are:Determining the amount of capital required;Determining the capital organisation and structure;Framing of the organisation’s financial policies and regulations.Financial control: This is one of the key activities in financial management. Its main role is to assess whether an organisation is meeting its objectives or not. Financial control answers the following questions:Are the organisation’s assets being used competently?Are the organisation’s assets secure?Is the management acting in the best financial interests of the organisation and the key stakeholders?Financial decision-making: This involves investment and financing with regards to the organisation. This department takes decisions about how the organisation should raise finance, whether they should sell new shares, or how the profit should be distributed.

The financial management department of any firm is handled by a financial manager. This department has numerous functions such as:

• Calculating the capital required: The financial manager has to calculate the amount of funds an organisation requires. This depends upon the policies of the firm with regards to expected expenses and profits. The amount required has to be estimated in such a way that the earning capability of the organisation increases.
• Formation of capital structure: Once the amount of capital the firm requires has been estimated, a capital structure needs to be formed. This involves debt equity analysis in the short-term and the long-term. This depends upon the amount of the capital the firm owns, and the amount that needs to be raised via external sources.
• Investing the capital: Every organisation or firm needs to invest money in order to raise more capital and gain regular returns. Hence, the financial manager needs to invest the organisation’s funds in safe and profitable ventures.
• Allocation of profits: Once the organisation has earned a good amount of net profit, it is the financial manager’s duty to efficiently allocate it. This could involve keeping a part of the net profit for contingency, innovation, or expansion purposes, while another part of the profit can be used to provide dividends to the shareholders.
• Effective management of money: This department is also responsible for effectively managing the firm’s money. Money is required for various purposes in the firm such as payment of salaries and bills, maintaining stock, meeting liabilities, and the purchase of any materials or equipment.
• Financial control: Not only does the financial manager have to plan, organise, and obtain funds, but he also has to control and analyse the firm’s finances in the short-term and the long-term. This can be done using financial tools such as financial forecasting, ratio analysis, risk management, and profit and cost control.

Why is Financial Management important?

This form of management is important for various reasons. Take a look at some of these reasons:

• Helps organisations in financial planning;
• Assists organisations in the planning and acquisition of funds;
• Helps organisations in effectively utilising and allocating the funds received or acquired;
• Assists organisations in making critical financial decisions;
• Helps in improving the profitability of organisations;
• Increases the overall value of the firms or organisations;
• Provides economic stability;
• Encourages employees to save money, which helps them in personal financial planning.

Even everyone should manage with simple strategy.

5 simple things-

1. Save maximum you can.
2. Don't take loans or don't use access credit card.
3. Part your income.
4. Do investment in best stock for long term, Gold and Land.
5. If you have liabilities, remove as soon as possible. Without paying huge interest.

Financial management refers to the efficient and effective management of money (funds) in such a manner as to accomplish the objectives of the organization. It is the specialized function directly associated with the top management.

The term typically applies to an organization or company's financial strategy, while personal finance or financial life management refers to an individual's management strategy. It includes how to raise the capital and how to allocate capital, i.e. capital budgeting. Not only for long term budgeting, but also how to allocate the short term resources like current liabilities. It also deals with the dividend policies of the share holders.

A Financial Management process is a method by which costs (or expenses) incurred on a project are formally identified and administered. Effective financial management is vital for the growth and success of the organization. The scope of financial management includes decisions and considerations regarding the size of investments, sources and range of capital use.

To maintain Profitability, Liquidity, Efficiency and Stability, an organization must consider the various elements of financial management.

Financial Management consists of the following elements which have been discussed below in detail:

• Planning

Planning is the initial step which is required to be taken before furthering any other business procedures. Many companies also hire professional financial planners to set up effective financial plans for their target and objective achievement.

• Controlling

Controlling and administering how the company's valuable resources are being utilized helps improve its various departments. Proper records should be maintained for financial and other monetary related funds of the organization as well.

• Organizing and Directing

Financial planners organize regular and proper meetings where financial matters are addressed, and decisions are taken in their regard. Professional directions are given for appropriate allocation and utilization of organizational resources.

• Decision Making

Financial Management involves decision-making as top authorities decide the direction of the organization's monetary funds. Once the financial decisions are finalized, they are circulated as financial documents, and economic activities occur according to the organization's financial decisions.

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What is basic financial management?

The first basic rule of financial management is “it starts with you”. Forget what anybody else tells you. Learn this first principle and everything else falls in line. Here is why:

• You are the person responsible for resources that you earned. Nobody gives a piss about your finances unless you owe them money, are dependent on you, or like to receive things from you.
• You have to know where money is coming and going. If you delegate it to somebody else, then verify it. Balance your checkbooks and accounts regularly as well as investment accounts.
• Pay yourself first, your family first, or people depending on you and your family first. Everybody else is second, third, and fourth. Make savings a regular habit. What you do with those savings is left for each person to decide based on their appetite for risk.
• Housing and transportation are two of the biggest expenses of most family household budgets. Minimizing or keeping these two expenses low results in excess funds that can lead to better household financial management.
• Understand the difference between debt that moves the needle in a positive way versus debt that moves the needle in a negative way. It is different for everybody. The way I use debt to move the needle forward and positive is different than most people.

Simply defined:

“Financial planning is to optimally utilise the money earned by investing and spending wisely”.

Financial planning recognises that while the income is finite, there are infinite needs / wants and avenues to spend. So it is a question of prioritisation.

Financial planning also recognises that active income earning years will come to an end some time but the expenses will continue to happen. So a portion of current income is saved wisely to provide inflation beating post tax return and build wealth. This wealth is used to generate income when other active sources of income ceases.

One can learn financial planning from tons of resources available. One may also take the services of a financial planner.

In a nutshell understand the following ten elements that are important:

1. The concept of inflation and how it erodes purchasing power of money
2. The power of compound interest
3. Insurance, its place in financial planning and why combining insurance and investment is a bad idea
4. The benefit of “time” in building wealth
5. How taxation impacts building of wealth
6. What are the various types of risks to which an investment is exposed to
7. What are asset classes; what are the risk, liquidity and return profile of each asset class.
8. What are financial goals and why are they needed
9. What is retirement planning and how life expectancy affects such planning
10. How wise investments can set up an alternative source of income without actively working for it.

The elements of financial management encompass various components that are essential for effective financial decision-making and management within an organization. The key elements include:

1. Financial Planning: Financial planning involves setting goals, formulating strategies, and creating a roadmap for managing the organization's financial resources. It includes forecasting future financial needs, estimating revenues and expenses, and developing budgets.
2. Budgeting: Budgeting is the process of creating a detailed plan for allocating financial resources to different activities, departments, or projects within the organization. It involves setting targets, establishing spending limits, and monitoring actual performance against the budget.
3. Cash Flow Management: Cash flow management focuses on monitoring and optimizing the inflow and outflow of cash within the organization. It involves forecasting cash flows, ensuring adequate liquidity to meet obligations, managing working capital, and effectively managing accounts receivable and accounts payable.
4. Risk Management: Risk management involves identifying, assessing, and mitigating financial risks that could impact the organization's performance and objectives. It includes analyzing risks associated with interest rates, exchange rates, credit, market volatility, and other factors. Risk management strategies may involve diversification, hedging, insurance, or contingency planning.
5. Capital Structure Management: Capital structure management involves determining the optimal mix of debt and equity financing to fund the organization's operations and investments. It includes assessing the cost of capital, analyzing the financial leverage, and making decisions regarding the issuance of stocks, bonds, or securing loans.
6. Investment and Capital Budgeting: Investment and capital budgeting refer to the process of evaluating and selecting long-term investment projects that generate future cash flows and create value for the organization. It involves analyzing the feasibility, profitability, and risk of investment opportunities and allocating resources to projects with the highest potential returns.
7. Financial Analysis and Reporting: Financial analysis and reporting involve interpreting financial data, preparing financial statements, and generating reports to assess the organization's financial performance. It includes analyzing profitability, liquidity, solvency, and efficiency ratios, as well as communicating financial information to stakeholders.
8. Financial Control and Monitoring: Financial control and monitoring involve implementing internal controls, policies, and procedures to ensure the integrity and accuracy of financial information. It includes conducting audits, reconciling accounts, detecting and preventing fraud, and ensuring compliance with financial regulations and reporting standards.
9. Performance Measurement: Performance measurement entails evaluating the organization's financial performance against established goals and benchmarks. It includes analyzing financial ratios, key performance indicators (KPIs), and financial metrics to assess the organization's profitability, efficiency, and overall financial health.
10. Financial Decision-Making: Financial decision-making involves making informed choices based on financial analysis, forecasting, and risk assessment. It includes decisions related to investments, financing, dividend distribution, mergers and acquisitions, and strategic financial planning.

These elements are interconnected and interdependent, and effective financial management requires a holistic approach that considers all these aspects to ensure the organization's financial success and sustainability.

The approaches are: 1. Traditional View 2. Modern View 3. Liquidity and Profitability.

Traditional approach:

Financial management is primarily concerned with acquisition, financing and management of assets of business concern in order to maximize the wealth of the firm for its owners. The basic responsibility of the Finance manager is to acquire funds needed by the firm and investing those funds in profitable ventures that will maximize firm’s wealth, as well as, yielding returns to the business concern.

Modern View:

The globalization and liberalization of the world economy has caused to bring a tremendous reforms in financial sector which aims at promoting diversified, efficient and competitive financial system in the country. The financial reforms coupled with diffusion of information technology has caused to increase competition, mergers, takeovers, cost management, quality improvement, financial discipline etc.

Liquidity and profitability:

Ezra Solomon states that “liquidity measures a company’s ability to meet expected as well as unexpected requirements of cash to expand its assets, reduce its liabilities and cover up any operating losses.”

Financial management encompasses various approaches:

1. Traditional Approach: Focuses on maximizing shareholder wealth through efficient allocation of resources and profit maximization.
2. Modern Approach: Emphasizes wealth maximization for shareholders while considering broader stakeholder interests and social responsibility.
3. Risk Management Approach: Prioritizes identifying and mitigating financial risks to safeguard assets and ensure financial stability.
4. Value-based Management: Centers on creating long-term value for stakeholders by aligning financial decisions with organizational goals and values.
5. Behavioral Approach: Considers psychological factors influencing financial decision-making and behavior.

Cash the board alludes to the course of actually dealing with your funds, including planning, saving, money management, and pursuing informed monetary choices to accomplish your monetary objectives. It includes making an arrangement for how you will utilize and dispense your cash to meet your present moment and long haul targets.

Compelling cash the executives includes a few key standards:

Planning: Making a financial plan assists you with following your pay and costs, guaranteeing that you're not spending more than you procure. It permits you to dispense assets for fundamental costs, reserve funds, ventures, and optional spending.

Reserve funds: Saving a piece of your pay routinely helps construct a secret stash and save for explicit objectives, like purchasing a house, taking some time off, or resigning easily.

Obligation The board: Overseeing obligation is urgent to keep away from exorbitant interest installments and keep a solid FICO rating. Focusing on taking care of exorbitant premium obligations can let loose more cash for reserve funds and ventures.

Effective financial planning: Putting away your cash admirably can assist it with developing over the long haul. Contingent upon your gamble resilience and monetary objectives, you can put resources into stocks, securities, land, shared reserves, and different resources.

Monetary Objectives: Defining clear monetary objectives helps guide your cash the board endeavors. Whether it's purchasing a vehicle, taking care of educational loans, or resigning early, having objectives provides you a feeling of motivation and bearing.

Standard Audit: Consistently evaluating and changing your monetary arrangement is fundamental as your conditions, objectives, and financial circumstances change. Adaptability in your arrangement permits you to adjust to startling circumstances.

Teaching Yourself: Remaining informed about individual accounting themes, venture choices, and financial patterns enables you to pursue informed choices that line up with your objectives.

Does cash the executives work? Indeed, compelling cash the executives can altogether further develop your monetary prosperity. By following these standards, you can:

Diminish Monetary Pressure: Knowing where your cash is proceeding to have an arrangement set up can decrease nervousness about cash matters.

Accomplish Objectives: Legitimate cash the board assists you with making progress toward your monetary objectives, whether they include putting something aside for a home, subsidizing schooling, or partaking in an agreeable retirement.

Create Financial momentum: Money management and saving astutely can prompt long haul abundance collection and monetary security.

Answer Crises: Having a rainy day account can assist you with taking care of startling costs without crashing your monetary strength.

Keep away from Obligation Traps: Powerful cash the board can keep you from gathering extreme obligation and falling into monetary snares.

Work on Personal satisfaction: Dealing with your cash well can give a feeling of command over your funds, which can emphatically influence your general personal satisfaction.

Nonetheless, it's vital to take note of that cash the executives is certainly not a one-size-fits-all arrangement. It requires progressing exertion, discipline, and variation to your own conditions and objectives. Also, outer elements like monetary vacillations can impact the results of your monetary choices. It's wise to look for counsel from monetary experts and instruct yourself on monetary issues to go with informed decisions.

Ensuring sound financial management isn’t as complicated as it might seem—it’s more about discipline and understanding your priorities. To build a solid financial plan, ask yourself these three critical questions:

1. Is your family financially secure if something happens to you?

If yes, that’s great! If not, your first step should be to buy a term insurance plan. It’s the simplest and most cost-effective way to ensure your family is protected in case of an unfortunate event.

2. Can you handle a medical emergency without draining your savings?

If yes, well done! If not, invest in a health insurance policy. This is especially crucial if you’re living in an expensive Tier-1 city where medical costs can skyrocket. Health insurance ensures that unforeseen medical expenses don’t derail your financial stability.

3. Do you have enough liquid funds to cover 6 months of expenses in case of a job loss or crisis?

If yes, you’re on the right track! If not, focus on building an emergency fund that can sustain you for at least six months. This gives you a financial cushion during tough times and keeps you from falling into debt.

Once you’ve addressed these basics, you can start thinking about investments to grow your wealth. Remember, the goal is to make your money work for you—not the other way around.

Let me know if you want more details on investing, and if you found this answer helpful, feel free to follow and upvote! 😊

By providing robust financial business analytics wrapped in dashboards, BI makes financial management more efficient on all fronts:

• Cash flow management

Cash flow is crucial in non-ideal conditions in which current business has to function – when one crisis is followed by another. Some clients ask for extended terms, and others just slow down payments… With BI, you will have visibility into your cash flow and make accurate forecasts to improve its health.

For example, with the Cash Overview report in Power BI, you’ll get a grasp of inflows and outflows in system currency, total bank balance and balance by a legal entity, today’s actual vs forecasted balance, and more. Meanwhile, cash flow forecasting itself allows you to go into more detail and get daily forecast summaries.

• Revenue management

The mission-critical questions like what, when, and who to sell as well as what price to set can be answered more easily and accurately when the data is collected, interpreted, and visualized by a financial BI system.

Business Intelligence offers a 360-degree analysis of pricing, inventory, promotional campaigns, and product launches. BI-driven revenue management helps businesses from a wide array of industries keep the lights on and reach target profitability. Take, for instance, hotel chains that use BI to determine optimal room rates, forecast reservation, staffing needs, inventory levels, and other resources to avoid problems with procurement and staffing during off-seasons and peak seasons.

• Expense management

For any organization that wants to stay in the business, it’s important to pay the bills on time, which can’t be done without proper expense management. But what makes it so? BI, among other things, is designed to keep track of the company’s expenses. It enables businesses to replace piles of receipts and spreadsheets with insightful dashboards to gain a holistic view of staff spending, ensure compliance with expense policies, and track T&E trends.

The decision to use special software for managing company’s costs is getting even more effective when bolstered with scheduled dashboards and reports email delivery. These tactics help managers keep an eye on their employees, set up alerts and notifications to manage expenses in a timely manner, and connect BI tools to your organization’s expense, billing and online travel reservation systems.

I hope my answer was helpful!

Most financial management plans will divide into four elements commonly recognised in financial management. These four elements are planning, controlling, organising & directing, and decision-making.

->Four elements of financial management:

(i)Planning
This includes financing, budgeting, role distribution, and customer research.

(ii)Controlling
It's important to ensure that all staff members are aware of the goals and their role in achieving that goal.

(iii)Organising and directing
You do not need to start implementing a strategy if you don’t even have all the resources.

(iv)Decision making
Decision-makers must select the option that best fits goals and objectives after determining all alternatives and possible strategies.

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Financial Management is concerned with obtaining funds at minimum cost and its effective utilisation to maximize the wealth of shareholders.

Elements of Financial Management:

1. Estimating the requirements of funds
2. Investment decisions :investment is made in fixed assets for creating productive capacity and investment in working capital for smooth running of the business. Deciding about ratio of investment in fixed assets and current assets
3. Financing decisions : deciding about various sources. Long term as well short term. Deciding the capital structure. Ratio of debt to equity.
4. Cash management
5. Financial evaluation and control
6. Dividend decisions Taking the decision how much to pay to shareholders dividend and how much to retail..

Financial management is a wide subject, and the role of professionals vary from industry to industry. However, in my opinion, financial management is all about finance and investment (the inflow and outflow of the assets).

Some professionals in this field are aim to make fund for the projects or the companies, such as IPO and making analysis to persuade investors to invest in the project.

Another key role of financial management is making wise investment. Investment has a lot of methods, such as investing money into another company (buying stocks) , investing tangible assets or intangible assets like knowledge and time. Professionals may evaluate the project through various index to find out whether they should make investment in it, or analyse the operation of the company to improve the efficiency and effect of the assets we invest ,etc.

Understanding money management is like mastering the art of navigating a financial labyrinth. It's not just about budgeting or saving; it's a holistic approach to handling your finances wisely. In essence, money management involves creating a roadmap for your financial goals, tracking your income and expenses diligently, and making informed decisions to optimize your resources. It's akin to steering a ship; you need a clear direction and the ability to adapt to changing waters. Prioritizing expenses, setting up an emergency fund, and investing intelligently are integral aspects of effective money management.

Managing money isn't a one-size-fits-all scenario; it's highly personalized. It requires aligning your financial habits with your aspirations, considering factors like income sources, lifestyle choices, and long-term objectives. To manage money effectively, start by creating a budget that reflects your income and expenses realistically. Track where your money goes to identify areas where you can cut back or optimize spending. Additionally, consider investing in avenues that align with your risk tolerance and financial goals to make your money work for you in the long run.

If you need help mastering the intricacies of money management and optimizing your financial journey, seek guidance from SingleDebt, a reputable financial advisory firm specializing in empowering individuals to navigate their financial landscapes with confidence and clarity.

Its simple.

Financial accounting (F) is concerned with the production of financial statements in accordance with the relevant accounting standards and legislation.

Management accounting (M) is carried out to assist management in discharging their duties to plan , direct and control the operations of the business. It is concerned with the process of measuring, analysing, interpreting and communicating information to management in a form which is easy for them to understand.

Why information is mainly produced

F: External use

M: Internal use

Purpose of information

F: To record the financial performance in a period and financial position a the end of the period.

M: To aid planning, controlling and decision making.

Legal requirement

F: Limited companies must produce financial accounts

M: None (Yey!)

Formats

F: Follow accounting standards and company law. (.( IFRS, GAAP and etc)

M:Management decides based on the information.

Nature of information

F: Mostly Financial

M:Financial and non financial.

Time period

F: Mainly a historical record.

M:Historical and forward looking.

Additional information: As I have exposure in both, let me give you some added information. Its strictly based on my personal experience, feel free to disagree with it.

Job Scope:

F: Wide

M: Narrow ( In our group Financial Accountant to Management Account ration is 8:1)

Interesting

F: Initially you feel bored

M: Damn interesting

Salary

F: Junior Accountants get fairly low amount compared to Ass Management Acc.

M: Comparatively high!

Recognition in the firm

F: Narrow! you need to compete with other accountants, if all your colleagues are at the same level, unless you have a professional degree its hard to differentiate yourself. Reporting hierarchy is complicated therefore your seniors might get the credit for your hard work. :P

M: Directly you will be working with CEO, CFO, FM. If you are a performer, you’ll gain your credit you deserve!

An accountant must know the rudiments of Financial Accounting whereas he/she can survive without having any knowledge in Management Acc. If you having both Financial and Management accounting knowledge, it can be a competitive advantage in any industry. In addition to your college/ university degrees,I would strongly suggest to obtain professional qualification in order to differentiate yourself. Financial Acc : CPA, ACCA, AAT, CA ; Management Acc: CIMA, CMA.

Have a goal, be determined and persistence towards it.

My best wishes.

Thank you.

a. Principle of Accountability

When presenting an explanation of an audit opinion for each use of funds and the duties that have been assigned, this principle is a legal and moral requirement in accounting theory.

As a result, each individual and company must be prepared to explain the usage and implications of these funds in great detail.

The goal of this principle is to show that adjusting the operating cost payment system and the available finances is one strategy to keep your firm healthy and financially viable.

b. Consistent Principle

When it comes to handling a company's finances, it's important to be wise, consistent, and consistent. If a change is made, it must be accompanied by clear and suitable justifications.

c. Principle of Transparency

The purpose of this principle is that management is open to users of accounting information when it comes to delivering information about financial activities. This is done to ensure that there are no future misunderstandings or manipulations.

d. Principles of Accounting Standards

Accounting fundamentals must be used in line with generally recognized accounting principles and standards in an organization or firm.

e. Integrity Principle

Every individual and organization must have high integrity when they want to run a company's operations. This is proven when the company is able to make complete and accurate financial reports.

Financial management approach measures the scope of the financial management in various fields, which include the essential part of the finance. Financial management is not a revolutionary concept but an evolutionary. The definition and scope of financial management has been changed from one period to another period and applied various innovations. Theoretical points of view, financial management approach may be broadly divided into two major parts.

Traditional Approach

Traditional approach is the initial stage of financial management, which was followed, in the early part of during the year 1920 to 1950. This approach is based on the past experience and the traditionally accepted methods. Main part of the traditional approach is rising of funds for the business concern. Traditional approach consists of the following important area.

Arrangement of funds from lending body.
Arrangement of funds through various financial instruments. Finding out the various sources of funds.

With a good financial management system, you will know not only how your business is doing financially, but why. And you will be able to use it to make decisions to improve the operation of your business.

Why is financial management important?

Because a good financial management system enables you to accomplish an important big picture and daily financial objectives.

A good financial management system helps you become a better macro manager by enabling you to:

• Manage proactively rather than reactively.

• Borrow money more easily; not only can you plan ahead for financing needs, but sharing your budget with your banker will help in the loan approval process.

• Provide financial planning information for investors.

• Make your operation more profitable and efficient.

• Access a great decision-making tool for key financial considerations. Financial planning and control help you become a better micromanager by enabling you to:

• Avoid investing too much money in fixed assets.

• Maintain short-term working capital needs to support accounts receivable and inventory more efficiently.

• Set sales goals; you need to be growth-oriented, not just an "order taker."

• Improve gross profit margin by pricing your services more effectively or by reducing supplier prices, direct labour, etc., that affect the cost of goods sold.

• Operate your business more efficiently by keeping selling and general and administrative expenses down more effectively.

• Perform tax planning.

• Plan ahead for employee benefits.

• Perform sensitivity analysis with the different financial variables involved.

Hope this helps!

Thank you

Since I am a fresh Financial Management graduate.
I just wanna share what I’ve learned.

According to the seminar I’ve attented before entitled “Peso and Sense” regarding The Proper Money Management which basically I think co-related to the question.

It introduce in us the basic principle on how to properly save our money while we are just a students. The said principle is known as 10.20.70 Principle the principle was came from one of the best-selling author, entrepreneur, preacher and a minister namely Eugenio Isabelo Tomas Reyes Sanchez Jr. or widely known as Bo Sanchez here in the Philippines.

The 10 represents a percentage amount of money you should return to God. We call it as tithes. One thing about tithes is that it provides opportunity to recognize our great Provider as the source of all blessings.

The 20 represents a percentage amount of money you should set aside after returning your tithes. You can label it as savings or investment fund.

The 70 remaining was for your whole expenses.

For Example. You are working and you have a monthly income of 10,000 pesos. Then you should return the 10 percent tithe (1,000 pesos) to God, then save 20 percent (2,000 pesos) and live with 70 percent (7,000 pesos) as your expenses.

Yes. It seems hard at first to follow the principle but if you have a strong dedication to improve your finances there’s no reason for you not to achieve.

Now that I’m working. I just continually what I’m doing before as a student and I confidently advice to everyone that it was really worth it! hehe thanks for reading.

MEANING

• Financial Accounting is an art of recording and reporting past financial transactions.
• Financial Management help the firm to manage its asset and liabilities to plan for future.

PURPOSE

• Financial Accounting provide financial position of the company
• Financial Management help to decide the future plans and manage the assets.

USERS

• Financial Accounting useful for outsiders like creditors, shareholders and also common public to know about the financial position of company
• Financial Management useful for insiders like management and shareholders of the company to know about the company’s future activities.

PROCESS

• Financial Accounting involve the creation of financial statements like Income statement, Balance Sheet.
• Financial Management involve the process of planning, decision making, analyse the decision and control or manage it.

Thank you…

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