The economic and financial management of the company implies the planning and correct administration of the resources of an organization to guarantee a positive cash flow. It includes everything from the maintenance of financial assets to the risk identification and management process.
That is, it is about managing expenses and income so that everything works correctly so that a company grows and can be successful. It controls everything related to the financial activities of the company, including obtaining and using funds, payments, accounting, risk assessment and other aspects related to finances.
Financial management, administration and finances are essential to ensure the successful operation of any organization. Having a good economic strategy will help you :
- Know the resources available to your company to make it grow. From launching a new product or services to internationalizing the business.
- Provide an image of trust to customers, suppliers and investors.
- Have a more competitive business in a market that has fewer competitors for your business organization.
- Ability to make more accurate financial decisions thanks to having real information.
- Achieve the objectives set, both in the short, medium and long term.
What are the functions of financial management?
Any organization needs to have an administrative and financial management in order to achieve its objectives and achieve long-term success.
The functions of financial management are numerous, but they can be divided into two large groups: as a management system and as a particular area of business management. Among all of them there is a feedback that allows to carry out an exhaustive control. Take a look at its main functions.
One of the most important functions is to design an overall economic development strategy for the company and observe the financial market forecast. It is based on setting objectives and analyzing indicators of long-term financial activity.
It is necessary to establish the actions that must be solved in the short term, as well as how to design an action plan to guarantee the financial growth of the organization. In short, the financial strategy is considered the integral part of the economic development of the company.
In economic management, it is necessary to guarantee the constant adaptation of organizational structures to changing conditions in order to achieve the success of the company and the financial areas.
This function is in charge of defining the processes, in addition to promoting the control and adequate allocation of financial resources. It is closely related to financial strategy.
It is important to manage the information of the financial needs of the company, all the data collected with external and internal sources of information to be able to mark the objectives of the company. This function is responsible for monitoring and constant organization, both of the financial market and the financial situation of the business.
Investment management consists of managing equity and fixed income funds, stocks and shares, currencies or properties to improve the possible return on your investment, taking risk into account.
It is of great importance because the main function is to evaluate the investment attractiveness of real projects, even to choose the most effective forms of financing.
The function of assets consists of investing in the titles or values that allow to achieve the best results to reach the determined profitability.
It is in charge of many aspects, but these are some of the most representative: the assets that are bought or sold, how much capital is to be kept in cash, what profitability is expected to be obtained from each investment or how much risk is available to assume in each investment.
Among the functions of risk management is the task of identifying, analyzing and responding to risk factors during a project or investment of the company. First, it is designed to identify risk, this helps to quantify and predict the impact it may have.
By having careful and constant risk management, it is possible to greatly reduce the risks that the business must take. In addition, it allows a much more effective problem solving.