Finance plays a key role in the overall growth of an organisation. The success or failure of any organisation primarily depends on the efficacy of its financial management. That is why every business, whether big or small, looks for an erudite and a highly-skilled finance professional who can manage the finances effectively.
A finance manager shoulders major responsibilities. For example, all the financial activities within an orgainsation are undertaken by a finance manager. It is his duty to plan stellar strategies and manage multifaceted activities that ultimately affect the goodwill, financial status and growth perspectives of the orgainsation.
Some of the major responsibilities of finance manager are:
Fund Raising
Cash and liquidity play a significant role in proper fundraising for a business. The orgainsation can raise funds either through equity of shares or through debentures. Therefore, there should be a balanced ratio between equity and debentures which is ensured by the finance manager.
Allocation of the funds in the right place
After raising the funds, their proper allocation is the next big step. It is again the task of a finance manager to allocate the funds. The manager should consider the size and growth capacity of the company while allocating funds. He should also keep in mind the kind of assets the firm is holding whether long term or short term. There should even be sufficient funds for the maintenance tasks such as replacement of old plants and machinery. He should also keep in mind the mode from where the funds have been raised. All these factors affect the firm in some or the other way.
Profit and its planning
For every orgainsation, earning profits is the fundamental aim other than customer satisfaction. Profit gives a reason to the orgainsation for sustaining and thriving in the market. It is the task of a manager to formulate apposite strategies that maximise profits. However, it needs proper planning.
There are various factors that determine the profits. They are stated as follows:
- Economic state of the firm
- Price of the product
- Cost of production and selling price
- Demand and supply mechanism of the product
Fixed cost plays a crucial role in planning profits. If the fixed cost in not determined in terms of fixed asset and the opportunity cost to recover the fixed cost is not calculated, then the firm may face huge fluctuations in profits.
Considering the capital market
There is continuous trading of shares in the stock exchange market which involves huge risks. A finance manager needs to have complete knowledge about the capital market so as to keep the firm at bay from any such risks. Hence, the main duty of the finance manager should be to calculate the risk in shares & debentures and create a provision to minimise the risks.
A finance manager is one of the key persons of an orgainsation with a huge role to play. That is why companies hunt for finance professionals and the market is flooded with ample opportunities for the right candidates. Our PGDM in Finance Management is a course that will entail the aspirants with essential skills and industry knowledge so that they can make solid financial strategies & decisions. In a nutshell, they can do justice to their post of finance manager.