We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Role of Financial Manager

essay
The whole doc is available only for registered users

A limited time offer! Get a custom sample essay written according to your requirements urgent 3h delivery guaranteed

Order Now

In these competitive times, survival depends largely on an organization’s capabilities to anticipate and prepare for change rather than just react to it. The role of the financial officer, thus, becomes crucial to meet these technological, economic and political, changes.

In today’s business world what is the role of a financial manager? We have all heard at one time or another that “a financial managers wears many hats.” The role of the financial manager has expanded beyond traditional responsibilities related to company’s finances. A financial manager though his/her understanding of the company’s financial health, the current market, and the goals of the company helps set directions and guides decision making.

The role of the financial manager is undergoing enormous change. He/she is transforming from a steward of financial assets into an internal venture capitalist because tomorrow’s finance managers will be much more involved in deciding the future of their companies. He/she will have to assess the risks in funding these opportunities and be prepared to justify investments based on the value they will create as options in the future. Managing physical and even working capital will become less and less important as the focus of finance shifts increasingly to intangible assets. How these assets are valued and nurtured will have little to do with accounting goals. Because of these challenges, a finance manager is a partner to the CEO who is actively involved in anticipating industry trends, launching new ventures, valuing intangible assets, and managing business options far more dynamic.

A financial manager has numerous critical responsibilities, which include designing and fine-tuning a more responsive and effective “rolling forecast/budgeting process.” The financial manager will also need to increasingly be able to dynamically balance investments between old and new economy ventures, which are essential to fueling growth and shareholder value. The financial manager also is leading the effort to align the strategic plan with the new operating mode, change the organization structure, build the information systems and infrastructure, and develop the reporting and measures required to enable the enterprise to operate as smaller, independent business units. He/she is also breeding new economy from within. He/she must be on the constant lookout for new opportunities and be the driver in planning, negotiating and overseeing strategic alliances.

The fortification of finance is the driver of change. From safeguarding the assets of the company to being answerable to investors, finance is the voice of organization. The meteoric growth in the use of Internet has compelled the corporate word to take a second look at the factors that drive their businesses. The old rules no longer work in the new arena. In the hi-tech age, one can no longer group fundamental activities and manage them collectively. Enterprise resource planning systems provide companies with the ability to operate, manage and control the fundamental activities of businesses as individual entities. If the “think-tanks” in the domain of finance take the help of the information technology, they can become the innovators in the new millennium.

On the other hand we have accountants and their role is similar to that of a skilled technician who takes measures of a company’s health and writes a report. The accountant prepares financial statements on a periodic (such as quarterly) basis, to prepare and file tax returns, and to provide information and reports to other managers.

Similar to financial managers, “the role of corporate accounting has changed in the last decade,” Robert Koethner remarked. Accountants have moved more and more into the role of becoming business advisors. The role of the accountant is now less about the integrity of the numbers produced and more about strategy and assurance. “You become less of a pure numbers man,” said David Kappler, “and more of a salesman selling your ideas internally and externally, sometimes to a skeptical marketplace.” Jon Fundrey of BOC said that, “within the finance function it can be a tricky balancing act helping his information management colleagues deliver against their objectives.” The biggest thing in their business has been implementing business planning. An organization could go a long way with a well-structured business plan. The old lesson “dinned into journalists at an early age or follow the money” is now a universal rule of any business. The accountants are now center stage.

Ultimately, financial managers examine the data prepared by accountants and assess the firm’s past performance in order to make financing and investing decisions consistent with the firm’s plans and goals. Base on this analysis they make recommendations to top management regarding strategies for improving the company’s financial strength. A manager cannot make sound financial decisions without understanding the accounting information. The need for careful financial management remains an ongoing challenge in the business world. A good financial manager should be more than just the traditional manager, he or she should lead and help bring the company to a new level of functioning.

As the corporate world moves forward so does the function of the accountant and financial manager. With years they seem to have become more complex functions that are profoundly involved in the financial activities of a firm in order to help develop strategies and implement long-term goals for their organization.

References

B. Connell, (2004). The Diverse Roles of Professional Accountants in Business. Retrieved December 14, 2004 from http://www.ifac.org/Members/DownLoads/PAIB_Book_Final_v2.pdf

Financial Managers. Retrieved December 13, 2004 from http://books.mongabay.com/labor/010.html

Management and Business and Financial Operations Occupations: Financial Managers. Retrieved December 13, 2004 from http://www.umsl.edu/services/govdocs/ooh20022003/ocos010.pdf

The Financial Environment: Firms, Investors, and Markets. Retrieved December 13, 2004 from http://www.aw-bc.com/info/gitman_madura/ChapterOne.pdf

Related Topics

We can write a custom essay

According to Your Specific Requirements

Order an essay
icon
300+
Materials Daily
icon
100,000+ Subjects
2000+ Topics
icon
Free Plagiarism
Checker
icon
All Materials
are Cataloged Well

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

By clicking "SEND", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
Sorry, but only registered users have full access

How about getting this access
immediately?

Your Answer Is Very Helpful For Us
Thank You A Lot!

logo

Emma Taylor

online

Hi there!
Would you like to get such a paper?
How about getting a customized one?

Can't find What you were Looking for?

Get access to our huge, continuously updated knowledge base

The next update will be in:
14 : 59 : 59