Financial Management for Businesses in India

The age old practice of keeping a single manager who was required to overlook entire operations of a business have given way to the new world where there are many managers who are required to look after specialized categories of operations. Yes, the face of Indian economy has changed beyond recognition ever since India embarked upon the policies of liberalization in the early nineties. There has been tremendous growth in all sectors of economy with emphasis now on specialization to maximize the profits for any business. It is in this context that financial management for businesses in India has to be seen.

Today every company has separate financial managers who are entrusted with the responsibility of not only preparing financial reports but also to manage the investment policies of the company. In different companies these financial managers are called differently such as insurance manager, credit manager, controller, investment officer, financial planner etc. The term financial management is self explanatory in the sense that a person holding the title of a finance manager has to plan for the future of a business in such a manner so that there is a positive cash flow. It also requires administrations and maintenance of all the financial assets of the company. A finance manager also has to guard against any financial risk by identifying and then tackling it.

For the most part, a financial manager has to concentrate his efforts on assessment. He has to look at the audit reports, profit and loss accounts and the balance sheets to interpret them to judge the performance of any company. There are some who say that financial management is the science of money management, and they are right as a finance manager is answerable to all the ills related with finances of any company. In this context, it is easy to see that every individual is a finance manager as he has to look after his own as well as family’s finances.

From the point of view of any business, financial management is a process that is associated with both planning and control. When we talk of planning, it entails taking into account all the finances or funds that are available and planning the size and timing of expenditures. This means a financial manager distributes the assets in a scientific manner so as to get maximum returns on investment. Control on the other hand refers to keeping an eye on the cash flow. A financial manager is thus responsible for managing the incoming funds as well as their expenditure.

In any corporation, goals are set to be achieved in any given time frame, and the finance manager has to work accordingly to achieve these goals. They need to use the available resources in the most efficient manner so as to generate maximum profits for the company. This means that investors get an attractive return on their money.

In conclusion , financial management for businesses has become very scientific in India with the latest principles and practices of management being followed.