Planning and implementing: Financial management must plan, obtain and control the business’s finances for each department to achieve objectives

Financial needs

• Financial needs could be determined by the size of the business, the current phase of the business cycle and future plans for growth and development (where the business is and where it is heading).

Budgets

• Plan for achieving set outcomes and is based on forecast figures or expectations of future operations
• Create framework for internal decision making, monitor movements of business
• Budgets are drawn up to predict financial needs, they show (usually in dollar terms) the costs and benefits of a proposal.
• Includes developing financial budgets and forecasts that allow the business to budget for production, employment of human resources, raising appropriate funds from appropriate sources as well as developing budgets for all the other operations conducted by the business.

Record systems

• Record systems ensure that data is recorded and the information provided by record systems is accurate, reliable, efficient and accessible.
• Accurate and reliable financial records are an essential part of financial decision making.

Financial risks

• Financial risk is the possibility of the business being unable to cover its financial obligations. Factors such as theft of goods, non-payment of accounts receivable and interest raises must also be considered.

Financial controls 

• Tools that provide feedback on the financial performance of a business. They can include budgets, cash flow statements, income statements & balance sheets.
• These controls are vital for the continual and future planning and success of the business.