Functions of financial management

When we talk about financial administration, refers to the economic part of a company, which is one of its fundamental aspects, since it is what keeps the company afloat. entity, since an organization with financial mismanagement could go bankrupt even if it has all the necessary resources to be successful.

Companies that know how to properly manage their financial resources maintain a policy and a future vision, which causes that the company is always in constant development and innovation, as it always has the necessary resources due to its good management.

Financial management to be efficient requires having a clear goal and objective "The Maximization of shareholder wealth" In this way, the entity can be corporately functional, as long as it conducts itself in a responsible and ethical manner with the rest of the company. .

We must have something clear, the main function of the financial administration department is to be in charge of the acquisition, financing and administration of the different assets of the organization in decision-making, mainly in decisions that have to do with investments and the amount of assets that the organization needs to be able to keep up float.

Among the basic functions of this department are:

• Decide investments what the company should do. This is the most important function that this department has and perhaps one of the most important in all. the company, since poor decisions made in this department can have a high cost for the business.

• The department is the responsible for financing what the company does to stay afloat, as your finance manager must decide in the way the company wants to shape it to support itself in what has to do with the financing.

• Another very important function of the financial administration department is to search, find and locate the resources that the company needs: Sources or financing and investors that will keep the company afloat.

• The analysis of investment It is another of the great functions of this department, since it is in charge of studying all the possibilities that the company has to continue growing and developing. The management of this department must have the necessary skills to analyze and choose the most feasible opportunities when deciding for the good of the company.

• This department is in charge of risk management, since this function is studied well in depth by the department since they must know what is the level of risk that the company has in each investment.

In conclusion we can say that the finance department is the in charge of planning, controlling, organizing and directing economic resources within the company, at the same time making the decisions that leave the best benefits for the organization and that contain the least risk for the company and its shareholders, at the same time finding the most feasible opportunities to increase the capital of the entity.