What are the Functions of a Finance Manager?

Functions of Finance Manager

What are the Functions of a Finance Manager?

Finance Manager type and role of Finance Manager

A finance manager is a person who heads the department of Finance. He forms the various important activities in connection with management to help make financial decisions. His main focus is on the profitability of the firm.

So, now first we need to know what activity required in the modern firm which we can say that this firm is on the road to good financial health.

1. The determination of the nature and extent of staffing is aided by the financial budget programme.

2. Planning involves heavy reliance on financial analysis.

3. The control required the use of the techniques of financial ratios and standards.

As we know that every business required, irrespective of its size should have had a financial manager who has the following skillset which as follows: –

Analytical skills. Financial managers have required to have the analytical skills with the help of this skill he assist management to make a financial decision
Communication skills. With the help of excellent communication skills financial managers must explain and justify complex financial transactions.
Attention to detail. while preparing and analyzing financial reports and financial statements financial managers must pay attention to detail.
Organizational skills. As we know that Financial managers deal with a range of information and documents. They must have to stay organized to do their jobs effectively.

So we now discussed on Finance manager role he has to take to make decisions on the allocation and use of money by the various budget head or activity head of a particular budget.

Specifically, the finance manager should anticipate financial needs; acquire to find out financial resources, and allocate funds to various sources of the business.

If the financial managers handle each of these tasks well, his firm is on the road to good financial health. As we know that the financial manager is an integral part of the top management, he should make his decision and give recommendations to contribute to the overall progress of the business. It is his primary object, to maximize the value of the firm to it stockholders.

We should have to know that Financial managers do their tasks that are specific to their organization or specific industry.

For example,

A Government financial manager must be experts on government appropriations and budgeting processes,
A Healthcare financial manager must know about issues in healthcare finance. Moreover, financial managers must be aware of special tax laws and regulations that affect their industry.
The controller is the type of Finance manager, a Controller’s task the preparation of financial reports that summarize and forecast the organization’s financial position, such as income statements, balance sheets, and analyses of future earnings or committed expenditure. Controllers also have the task of preparing special reports required by governmental agencies that regulate businesses. Often, controllers oversee the accounting, audit, and budget departments.
Treasurers and finance officers to make their organization’s budgets to meet its financial goals and oversee the investment of funds. They prepared strategies to raise capital and also develop financial plans for mergers and acquisitions.
Credit managers have tasked the firm’s credit business. They set credit-rating criteria, and determine credit ceilings, and monitor the collections of past-due accounts.
Cash managers monitor and control the inflow and outflow of cash to meet the company’s business and investment needs.
Risk managers control financial risk by using hedging and other financial strategies to limit or offset the probability of a financial loss.
Insurance managers have tasks how best to limit a company’s losses by obtaining insurance against risks such as the need to make disability payments for an employee who gets hurt on the job or costs imposed by a lawsuit against the company.

Functions of Finance Managers

The following are some of the important functions of the finance manager.

Finance Manager should have to anticipate and estimate the total financial requirements of the firm with the help of preparing a financial plan
The knowledge that how to select the right sources of funds at the right time and at the right cost.
Balancing the company capital (Equity) and borrowed capital (Debt) for the best advantage of the firm.
Allocate the available funds as per the budget line item in the profitable avenues.
Maintain liquidity position of the firm and Synchronizing the finance inflow and outflow for better liquidity for the firm
Analyzed financial performance and plan for its growth with the help of continuous financial appraisal activity.
Administrate the activities of working capital management.
Protect the firm or company by the interest of creditors, shareholders, and the employees.
Concentrate more on fulfilling the social obligation of the business unit.
Keeping track of actual and projected cash outflows as per the particular budget line item and making adequate provision in time for any shortfall that may arise.
Negotiations and relations with banks and other financial institutions.
To find out Investment of funds available and free a short period.
Keeping track of stock exchange prices in general and prices of the company’s shares in particular.
Maintain relationships with production and sales departments for seeing that working capital position is not upset because of inventories, book debts, etc.
Keep update to management to financial implications of various developments in and around the company.
Supervise employees who working or worked on financial reporting and budgeting,
Review company financial reports and find out the ways to reduce costs,
Prepared financial statements, business activity reports, and forecasts to make a financial decisions.