Business / Role Of Financial Manager
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Autor: anton 29 November 2010
Words: 485 | Pages: 2
Role of the Financial Manager
It can be said that an accountant evaluates bookkeeper records and shows the results as losses and gains to show the progress or failures of a company and also its future limitations and potential. On the contrary, a financial managerâ€™s role is to maximize the value of a company. In order to achieve this, various types of financial statements are required to provide to investors. In the past, the role typically focused on generating and reinvesting finance capital. Almost every firm, government agency, and organization has one or more financial manager who oversees the preparation of financial reports, direct investment activities, and cash management strategies. However, as computers have reinvented how data is recorded and organized, many financial managers are spending more time developing strategies and implementing the long-term goals of their organization. The role of the financial manager is also changing in response to technological advances that have significantly reduced the amount of time it takes to produce financial reports. Financial managers now perform more data analysis and use it to offer senior management ideas on how to maximize profits and increase shareholder value.
One of the greatest concerns for companies and their employees today is increasing shareholder value. Companies are reinventing business approaches typically focused on efficiency and moving toward focus on effectiveness instead. Traditional methods no longer deliver all the necessary metrics and information needed to effectively manage a business. In todayâ€™s market, companies need to take a broader look at their strategy, operations and competitive environment. Senior management needs a coherent method to share a common vision and motivate strategically aligned behavior. The pay-off is increased value.
Shareholder value is reflected in corporate financial performance and market share performance. Financial performance is achieved through reducing costs and optimizing resources.
The duties of financial managers vary with their specific titles, which include but are not limited to: controller, treasurer or chief finance officer (CFO). Controllers direct the preparation of financial reports that summarize and forecast the organizationâ€™s financial position, such as income statements, balance sheets, and analysis of future earnings or expenses. Controllers also prepare special reports required by regulatory authorities. Often, they oversee the accounting, audit, and budget departments. Treasurers and finance officers direct the organizationâ€™s financial goals, objectives, and budgets. They oversee the investment of funds and manage associated risks, supervise cash management activities, execute capital-raising strategies to support a firmâ€™s expansion, and deal with mergers and acquisitions.
Managers specializing in international finance develop financial and accounting systems for the banking transactions of multinational organizations.
Other managers still, monitor and control the flow of cash receipts and disbursements to meet the business and investment needs of the firm. Risk managers oversee programs to minimize risks and losses that might arise from financial transactions and business operations undertaken by an institution. They also manage the organizationâ€™s insurance budget.
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