What is the relationship between financial management and other areas of management?

Answer 1

Financial management is one of the four functions managers must be able to perform. The other three are leadership, planning, and human resources. Financial management deals with money and the way it is used by a company to generate profits. It also includes how that money should be allocated among different departments in order for them to function properly. For example, financial management would tell you if your marketing department needs more funds or if they have enough. Get Link: Norwayoffice.biz

Answer 2

1. Financial Management and Marketing: It deals with planning and controlling the entire marketing activities of a concern and comprises the formulation of marketing objectives, policies, programmes and strategies. The purpose behind marketing management is to enhance the sales volume, to develop new markets, and to reach new customers. However, the philosophy and approach to the pricing policy are critical elements in the company's marketing effort, image and sales level. Since the determination of approximate price of the company's product is very important both to the marketing and financial managers, there should be a joint decision. While the financial manager can supply the vital information regarding costs, changes in costs at different levels of production and the profit margin required to carry on the business, the marketing manager provides information as to how different prices will affect the demand for the firm's product in the market and the firm's competitive position. Thus, the role of financial manager for the formulation of the pricing policies of the firm cannot be undermined.

2. Financial Manager and Personnel Management: The personnel manager organizes the personnel department, which is generally assigned the operative functions of employment, compensation, training, etc. These functions are performed in consultation with the heads of other departments. However, all these require finances and thereby the decision relating to these aspects can be taken by the personnel department, only after consulting with the finance department.

3. Financial Management & Production Management: Production is the conversion of raw materials into finished products, which is also called manufacturing of goods. The production department will have to ensure that production is carried on in the best manner at the lowest cost. However, production is indirectly related to the key day-to-day decisions by the financial manager. For instance, changes in the production process may necessitate capital expenditures, which the firm's financial manager should evaluate and then finance. Thus, management and production management are related.

4. Financial Management & Cost Accounting: Cost accounting is the steering wheel which keeps the organisation on a steady path of prosperity. Most large firms have a separate cost accounting department to monitor expenditures in their operational areas. It helps the management in carrying out its functions by providing cost information. The finance manager is concerned with the proper utilisation of funds and thereby he is rightly concerned with the operational costs of the firm. Moreover, as the financial manager of the firm will have to make suitable recommendations to keep the cost under control, the information supplies by cost accounting department is very pertinent to him.

5. Financial Management & Financial Accounting: Financial accounting is that part of accounting which is employed to communicate the financial information of a business unit. Thus, it aims ascertaining the profitability and providing information about the financial position of the concern. However, financial accounting is distinct from financial management, although both play role complementary to each other. If financial accounting is concerned with the recording, classifying, summarising and interpreting business transactions, the financial management is concerned with the task of ensuring that funds are procured at optimum cost and involve minimum financial risk. The information supplied by financial accounting is used by the financial manager to take decisions so as to help the concern in accomplishing its goals

Answer 3

Financial management is an important part of the management process because it keeps track of a company's financial standing. It helps to make sure that a company can pay its bills, and has enough money saved up in case something goes wrong. Financial managers are also responsible for making sure that all the other areas of business are functioning properly and being profitable so they can help keep the company afloat

Answer 4

[object Object]