Financial management notes on difference between accounting and financial function
Answers
Financial Management refers to that part of management activity which is normally concerned with planning and controlling a firm's financial resources. This branch of management deals with finding out various sources for raising funds for the firm. Financial Management is practiced by many Corporate firms and can be called Corporate finance or Business finance.
A financial manager has to concentrate on the following key areas of finance function:
* Estimating financial requirements of the firm
* Deciding suitable capital structure of the firm
* Selecting a source of finance
* Selecting a pattern of investment suitable for the firm
* Proper cash management , and
* Implementing financial controls.
The main objective of a business is to maximize the owner's economic welfare. Financial management provides a framework for selecting a proper course of action and deciding a commercial strategy. These are some of the elements that differentiates financial management from other managerial functions.