What’s the Role of a Finance Manager?. The position of a Finance Manager is one of the leading positions in a company. We, being professional students, must know the importance of a Finance manager for any organization. Here, we will make an effort towards understanding his duties & we will also see what he needs to do to comply with his responsibilities. Now check more details for “What’s the Role of a Finance Manager?” from below….
What’s the Role of a Finance Manager?
- Forecasting of Cash Flow: This is necessary for the successful day to day operations of the business so that it can discharge its obligations as and when they arise. It involves matching of cash inflows against outflows and the manager must forecast the sources and timing of inflows from customers and use them to pay the liability.
- Raising Funds: The Finance Manager has to plan for mobilizing funds from different sources so that the requisite amount of funds are made available to the business enterprise to meet its requirements for short term, medium term and long term.
- Managing the Flow of Internal Funds: The finance manager has to keep a track of the surplus in various bank accounts of the organization and ensure that they are properly utilized to meet the requirements of the business. This will ensure that liquidity position of the company is maintained intact with the minimum amount of external borrowings.
- To Facilitate the Cost Control: The Finance Manager is generally the first person to recognize when the costs for the supplies or production processes are exceeding the standard costs/ budgeted figures. Consequently, he can make recommendations to the top management for controlling the costs.
- To Facilitate Pricing of Product, Product Lines and Services: The Finance Manager can supply important information about cost changes and cost at varying levels of production and the profit margins needed to carry on the business successfully. In fact, financial manager provides tools of analysis of information in pricing decisions and contribute to the formulation of pricing policies jointly with the marketing manager.
- Forecasting Profits: The Financial manager is usually responsible for collecting the relevant data to make forecasts of profit levels in future.
- Measuring Required Return: The acceptance or rejection of an investment proposal depends on whether the expected return from the proposed investment is equal to or more than the required return. An investment project is accepted if the expected return is equal or more than the required return.
- Managing Assets: The function of asset management focuses on the decision-making role of the finance manager. Finance personnel meet with other officers of the firm and participate in making decisions affecting the current and future utilization of the firm’s resources. The decision-making role crosses liquidity and profitability lines. Converting the idle equipment into cash improves the liquidity. Reducing costs improves profitability.
- Managing Funds: Funds may be viewed as the liquid assets of the firm. In the management of funds, the financial manager acts as a specialized staff officer to the Chief Executive of the company. The manager is responsible for having sufficient funds for the firm to conduct its business and to pay its bills.
There cannot be a exhaustive list for all the functions of a Finance Manager. However, we tried to compile the most important roles of a Finance Manager.