What is Finance Management System? Scope and Objective of Financial Management

What is the Finance Management System?

Financial management means planning, organizing, directing and controlling the financial activities of the organization, this whole managing process of managing funds is called the Financial management system.

Definition of Financial Management by Authors

According to Guthman and Dougal

The activity concerned with the planning, raising, controlling and administering of funds used in the business.

According to Dr. S. N. Maheshwari,

“Financial management is concerned with raising financial resources and their effective utilization towards achieving the organizational goals.”

Importance of Financial Management in Business

  • Financial management helps organizations in financial planning.
  • Financial management provides economic stability.
  • Financial management helps in improving the profitability of organizations.
  • Financial management helps the organizations in Financial decision.
  • Financial management improves Financial growth of the organization.
  • Financial management improves operation management.

Functions of Financial Management

  • Financial Management helps in Financial Planning and Forecasting.
  • Financial Management ensure Funds for Investment.
  • Financial Management maintains Proper Liquidity of funds.
  • Financial Management helps to Control the Financial.
  • Financial Management helps in Management of cash.

Goals of Financial Management

  • To ensure a regular supply of funds.
  • To ensure optimum funds utilization.
  • To ensure safety on investment.
  • To maximization of Profit.
  • To reduce operating risks.
  • To Creating reserves.

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