The role of financial managers in maintaining records of business expenses
Introduction
Strategic planning, organization, direction, and control of a company's cash flow are all considered to be components of financial management. It entails controlling your financial resources and spending. Along with being crucial to tax management, it also encompasses the application of management principles to financial assets.
The effectiveness of your financial management will determine how successful your business is. It is crucial to commit the financial management of your company (other than a microbusiness) to a chartered financial manager who is skilled at juggling real and anticipated cash flows coming into and going out of your company.
A financial manager is a person who manages all of an organization's crucial financial operations. To guarantee that the funds are used as effectively as possible, the person in charge must have a long-term perspective. His activities have a direct impact on the company's profitability, expansion, and reputation.
Following are the main functions of a Financial Manager
Obtaining Funds
It's crucial to have enough cash and liquidity to meet the business's obligations. A company can raise money using both equity and debt. A financial manager is in charge of choosing the balance between debt and equity. A healthy balance between equity and debt must be kept.
Distribution of Funds
Allocating the funds is a crucial task after the funds have been raised through various means. The money should be distributed such that it is used as efficiently as possible. The following must be taken into account in order to allocate cash in the best way possible.
1.the firm and its growth capability
2.Status of assets whether they are long-term or short-term
3.Mode by which the funds are raised
Other managerial tasks are influenced by these financial decisions both directly and indirectly. Consequently, one of the most crucial activities is to create a good asset mix and allocate funds appropriately.
Financial Planning
One of the main purposes of any company organization is to make a profit. For every company to survive and thrive, making a profit is essential. Profit planning deals with how the company should use its profits.
Profit is a result of numerous factors, including cost and output, industry competitiveness, demand and supply dynamics, pricing, and economic conditions. The profitability of the company might rise when there is a healthy balance between variable and fixed factors of production.
The utilization of permanent factors of production, such as land and machinery, results in fixed costs. It's crucial to regularly value the depreciation cost of fixed production costs in order to maintain a tandem. Calculating an opportunity cost is necessary.
Knowing the Capital Markets
Shares of a corporation are traded on stock exchange and there is a continual selling and purchase of securities. Thus, one of a financial manager's key responsibilities is having a thorough understanding of the capital market. When securities are traded on the market there entails a large degree of risk involved. Therefore a financial manger recognizes and evaluates the risk involved in this trading of shares and debentures.
How the profits are distributed is at the financial manager's discretion. Many investors do not prefer the firm to split the income amongst share holders as dividend instead invest in the business itself to promote growth. A financial manager's actions have a direct effect on how the capital market functions.
What are a chartered financial manager's duties?
A licensed financial manager is essential for accounting audits, financial counseling, and maintaining accurate financial records. Accountants offer a wide range of services that will help you run a financially sound organization, including bookkeeping, financial analysis, and cost-cutting financial manager research.
Taxation
Your financial manager can outline all of your tax-saving options for you. He will assist you in completing your tax declarations and will keep you informed of all VAT disclosure reforms. He will represent the assessments in front of the tax authorities and give you advice regarding the various taxes you must pay.
expense control
To make sure that money is used as effectively as possible, your financial manager thoroughly examines the financial records and expenses of your company. This expert not only checks your accounts but also develops plans that can help your company's financial situation.
Accounting
This expert assists you in maintaining records of the financial dealings of your business. He produces the income statements with complete transparency and maintains the buy, sales, receipt, and payment ledgers on a regular basis.
financial mastery
It is a crucial component of financial management. Its main objective is to determine whether or not your company is accomplishing its objectives.
assistance with financial decision-making
The licensed financial manager aids you in making decisions regarding investments and business financing.
Financial Records and Computers
Financial records are increasingly created using computers. Financial functions are usually among the first to be automated. Most countries have automated payroll systems and many have automated budget and accounting systems. In some countries the entire financial management function has been incorporated into a single automated integrated financial management system. Financial records are often the first electronic records that records managers are likely to encounter.
With the increasing use of electronic technologies, record keeping is becoming technically more complex. Although the fundamental principles for keeping records in an electronic environment are more or less the same as in a paper environment, the skills required to manage them may be different. Records professionals and information technology (IT) specialists need to co-operate closely. This may require the creation of a specialised electronic records unit within the National Archives. The unit will require specialised equipment and an enhanced set of professional capacities.
Computerisation has implications for audit evidence. The principles relating to audit evidence do not change because an audit is being carried out in a computer environment. Computer records in the form of data on magnetic disks or optical disks still provide the auditor with audit assurance.
There are few precedents that address the admissibility of computer records in a court of law. Where computer evidence has been submitted in legal cases the courts have taken into account expert evidence on the effectiveness of the IT control environment before assessing the reliability of the computer data. Computerised transactions or images of documents may be inadmissible as legal evidence unless controls can be shown to be so strong as to remove reasonable doubt about the authenticity and integrity of data held by the system. Some of these controls are recorded on paper.
is therefore important that both the electronic records and the paper records that document the control environment are managed properly.
Creating an enabling environment will enhance the success of records management programmes. Institutions need to promote an environment which will encourage the better maintenance and use of records systems. Senior management should support an agenda for the future that includes
• developing a culture for creating, maintaining and using records
• strengthening the role of records management and records managers within an
institution
• identifying and strengthening records legislation
• defining and implementing records related standards
• developing tools to assess the vulnerability of records systems to corruption and fraud
• imposing disciplinary action for poor record keeping and providing incentives for better records management.
Conclusion
To make sure that money is used as effectively as possible, your financial manager thoroughly examines the financial records and expenses of your company. This expert not only checks your finances but also develops plans that can help your company's financial status.
The majority of the profit or loss in the comprehensive income reported in the financial statements was revealed by a review of the financial statements of food companies listed on the Warsaw Stock Exchange. In addition to the valuation duties of business entities, optional valuation models also contribute to other comprehensive income to a lesser level. Particularly striking is the absence of the revaluation model adopted by Polish businesses.