Importance of Financial Management Operations Manual

At the very start of the business, owners or shareholders will instantly be faced with financial matters that require financial decisions. It requires knowledge in an entirely different area - the area of financial management.

Defined, financial management is the process of planning financial decisions with the ultimate goal of maximizing the stockholders' wealth. In the world of finance, financial management is also known by other names like corporate finance, business finance, and managerial finance.

Aside from these, financial management also tackles other long-term goals, including business profitability and viability.

Achieving the goals of financial management, both long term and short term, involves a lot of processes and activities. These usually include cash management, financial risk management, financial accounting, managerial accounting, and others.

With the many financial management software products available, however, handling all of these tasks may become easier. Alternatively, businessmen may avail themselves of the services of a financial manager or seek the aid of companies providing financial management services.

At present, nearly all government or private organizations have at least one financial manager to guide investment activities, manage the groundwork of financial reports and develop and carry out cash-management schemes. In many firms, financial managers are the key personnel who administer the accounting and budget departments.

Financial managers also called as financial consultants or personal financial advisors use their knowledge of investments, tax laws, insurance and real estate to recommend financial options to individuals based on their short-term and long-term goals. Typically, a career in the financial management needs at least a master's degree. Courses available in the financial management in the United States include fundamentals of business law, accounting, management principles, e-commerce, ethics, finances, tax laws and other related topics. Both the creation of new businesses and growth of established companies will spur demand for financial managers, controller, treasurer/finance officer, credit manager, cash manager, and risk/insurance manager.

From a process perspective, Financial Management is the easiest and simplest business process to take care of no matter what business you're in. Then putting that knowledge into a financial management operations manual so that your financial records are maintained in a consistent manner that you can get the information you want.

So over time, I developed my financial know-how and then devised systems and procedures to help me to be able to better manage my business finances.

• ACCOUNTING ROLES

Clearly indicate who's responsible for your money in your financial management operations manual.

• YOUR ACCOUNTING SYSTEM

Many people rely on their bookkeeper or accountant to tell them what the best accounting system is to use. 

• CONTROLLING COSTS

To control costs in your business you should have a purchasing system in place. 

• ACCOUNTS PAYABLE

Outline and record in your financial management operations manual how your accounts are paid including the method and timeline. 

• BANK ACCOUNTS

Make sure that your financial management operations manual includes an outline of bank accounts, including GST accounts and who credit cards are issued to. 

• DATA BACKUPS

Your money records are THE most important records in your business. Include information on how to back up to this device in your financial management operations manual.

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