To start your business or to grow your business one thing that is necessary is finance. So it's very important to do financial management. Every business must have an adequate amount of finance for their smooth running of the business. To open and run an institute finance is very much important. Let us understand the financial management for institutes.
What is Financial Management -
It looks after the finance of the business that is funding, planning, organising, directing, controlling of finance. Objectives of financial management are -
Maintaining sufficient supply of funds
To get good return on investment
Efficient utilisation of money
Have a safe investment opportunity
Elements of financial management -
Planning - Every institute that is going to open must do some planning on its finance like who will be the investors in the institute, who will be the shareholders, how much funding is required to open an institute. It will also include the planning of structure.
Framing of the organisation’s financial policies and regulations.
Financial control - It is a very important aspect of finance management. Its main objective is to assess whether an institute is meeting its requirements or not.
Now the finance for every organisation or institute is handled by the person who is expert in finance. Let's have a look at the qualities of financial manager-
Must have a professional qualification in finance.
Interpersonal skills - For accounting and finance professionals, the ability to build successful relationships with customers is critical if you want to excel. When looking at two equally qualified hires, interpersonal skills makes the difference..
Communication skills - The person must have good communication skills so that he or she can convince the investors to invest, and can convince the students to get enrolled in the institute.
Financial Reporting - A Finance person must know the reporting structure of the financial expenses, so that he can elaborate the expenditure of the institute.
Analytical ability - Every organisation is looking to hire employees who can implement lateral thinking, the ability to analyse scenarios, and draw suitable conclusions.
Why is Financial Management important?
Below are the reasons for importance of financial management
Helps institutes in financial planning
Assists institutes in the planning and acquisition of funds
Helps institutes in effectively utilising and allocating the fund
Assists institutes in making critical financial decisions
Helps in improving the profitability of institutes
Increases the overall value of the firms
Provides economic stability
Encourages employees to save money
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