Ben Skarrasbrek and Alexi Terrovex of KMPG discuss the role of financial management, which includes making a good plan, forecasting financial needs, analyzing performance results and evaluating mega-trends. Financial management is heavily concerned with legal and regulatory compliance. The financial team includes the finance director, the controller(s), and the accounting staff.
The objectives of financial management are, to sustain profitable operations of the company, help the company grow, improve efficiency by reducing waste, have enough resources on hand to provide monetary liquidity for all the company’s needs, and make a good return on investment (ROI) for the capital invested.
The first effort is to ascertain the current financial position of the organization, which includes having a well-documented business plan and comprehensive budgets for operations.
The second effort is to employ capital, manage cash flow, create systems that generate accurate and timely financial reporting, and then make evaluations on how to improve future performance of the company by suggesting new operating or financial strategies. This information is useful to senior management and the board, as well as partially reported to investors.
The third effort is the verify the accuracy of the financial record keeping, to eliminate fraud, corporate malfeasance, and other risks of loss through comprehensive audits of the financial records. These audits occur on a regular basis, as well as on an as-needed basis, such as would be the case for an impending merger.
Financial management succeeds only when the financial team carefully follows the requirements of all these three efforts with diligence and accuracy in the analysis and reporting, and follows the processes of best practices in financial management.
Financial Management and the Planning Cycle
- Enhanced DVD
- ISBN: 978-1-62102-201-5
- Run Time: 15 Minutes
- Copyright Date: 2011