Finance management, Relationship of financial management with related disciplines, Pervasive nature of finance function.. ,

Financial management 

Financial management...

Finance means the Money which is required to perform the activities of the business.

Management is Planning, organising,directing& Controlling the activities of business in such a way so that Organization goals achieved.

Financial management is management of finance and all the financial activities of business.In financial management all the management functions like planning, organising directing,controlling are performed for attain organization goals.

financial Planning manager decide how much capital is required for doing business activities and attain organization goals other functions of finance manager are:-

Capital structure 

1) How much capital is required for doing business activities and attain organization goals.

2) From where we can get this capital.

3) What are the available resources of capital.

4) Decision regarding capital structure.

5) How much dividend will be pay and how much be retained for organisation's future growth and development.

6) How much working capital required in future .

Organising -In Organising of financial management finance manager doing following functions:-

1) First & Foremost function of finance manager is  procurement of funds ( arrangement of funds) 

2) He take decision whether he get capital by equity shares, preference shares or debentures all of these have their own negative and positive aspects.

3) After making arrangements of  capital structure of business he invest in various projects and activities of business.

4) Finance manager also maintain the optimum capital Structure, because both over Capitalization & under Capitalization is not good for organization.

Management of cash..

Directing...

In direction function finance manager directs all the financial activities of business.

In this function manager give directions of investment and other financial related activities.How we perform the project so we can get maximum returns?Directions are given by finance manager to the employees.

*How work should be perform so the cost is minimum?

Controlling..

In Controlling finance manager control all the financial activities of business.In this function manager perform these activities:-

1) Evaluation of performance -In this function manager evaluate the actual performance of employees, performance is evaluated by following aspects:-

a) Cost

b) Profits

c) Earning per share.

d) Return on investment etc.

Finance manager evaluate the performance by comparing to the standard performance(standard which are decided by finance manager).If there is any deviations between standard performance and actual performance action is taken and further planning is done for future to attain it.

And employees rewards, promotion, transfer also decide according to their performance.

Relationship of Financial Management with related disciplines.

Financial Management & Financial Accounting - Financial Management and financial accounting both are interrelated but both have different functions these are as follows:-

Financial management is over all management of financial department of organization Whereas

Financial Accounting is to make accounts of each and every every financial activities,it means every activity in which there is cash flows whether inflows or outflows is considered . Financial Management includes planning, organising,directing, controlling of financial activities but financial Accounting inform the total expenditure and total income of organization.In financial management decision related to finance are taken like investment, dividend , growth and development etc but these decisions are taken on the basis of accounts which are made by financial Accounting ( like Trading A/c, Profit &Loss A/c , Balance sheet,Cash Flow) .In financial management manager analysis the performance whether we attain profits or losses these performance are measure on the basis of accounts made by financial Accountant.

Pervasive nature of finance function..

Pervasive means everywhere, finance function is pervasive because it is perform in each and every department.Whether it is government organisations or private organisations finance is compulsory required . Without finance no one can perform run business.Other than business school,colleges, hospitals etc everywhere finance function is performed.Because every organisation wants to know the his total expenses,total income they earn and had to take many decisions for futher. Pervasive nature has been explained by these points:-

★ Finance is a life blood of each every organisation whether it is government or private organisations, finance is compulsory required.

★Without finance no one can perform or run business activities.

★finance is compulsory element which is required to earn finance ,it means finance earn finance ( Paisa paise ko khichta h) if anyone have no finance he is not able to earn finance because every business men have to invest money for earn money.