Importance Of The Financial Manager

Financing decisions of the firm deals with the financing mix or the financial structure of an organization. Financing a company requires important decisions related to methods and sources of finance, relative proportion and choice between alternative sources, time of floatation of securities, etc. The financial management is generally concerned with procurement, allocation and control of financial resources of a concern.

Management responsibilities include consideration of effectiveness and efficiency, compliance with laws and regulations and accuracy in reporting. Efficiency measures how well managers make use of available resources in achieving these objectives. Read more about methods of controlling the economic activities of enterprises here. While achieving the unit’s objectives, managers must also comply with applicable policies, regulations, and laws. This guide provides an overview of ICFR meaning and objectives, internal control, ICFR requirements for public companies, and links to other helpful ICFR resources. If your company has the growth potential for going public, you’ll be ready to meet ICFR requirements. A recent “KPMG Fraud Survey” found that organizations are reporting more experiences of fraud than in prior years and that three out of four organizations have uncovered fraud.

As organizations change in size and complexity, implement new systems, or are subjected to changes in regulations or accounting standards, it is likely the processes or policies that existed will need to be modified. Further, it’s important that any best practices or ‘lessons learned’ are regularly incorporated into the financial policies and procedures for continual process improvements. Effective financial policies and procedures can help provide efficient financial management, risk mitigation, and the alignment of financial operations with the overall mission of the organization. Before you begin creating financial policies and procedures or reviewing them for your organization, it is important to understand what these are, the intended purpose and benefits, how to implement them, and when they should be reviewed.

If the proper controls are in place, the systems should alert someone to possible fraud. Unfortunately, people tend to ignore the early warning signs and let the deceit continue. Everyone must follow the established procedures for the controls to work.

Managers decide whether to acquire funds internally or borrow from other investors, commercial banks, the Farm Credit System, life insurance companies, or, depending on how the firm is organized, by issuing stocks or bonds. Most financial losses could be easily avoided or quickly identified if organizations implemented basic financial controls, such as regular independent review of bank statements or following a proper expenditure review process. The following is a list of minimum internal controls that should be in place in any non-profit organization, regardless of size.

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