Finance officer, Accounting Basics

Finance Officer: the life blood of business is Finance. Procuring financial resources and their judicious utilization are the two significant activities of financial management. Financial management comprises three major decisions: investment decision, dividend decision and financing decision. Investment decision is perhaps the most important decision because it includes allocation of resources. This is concerned along with future that being uncertain includes risk. How the firm is allocating its scarce resources and is planning development will largely determine its value in the market place. Financing decision is related with determining the optimum financing mix or capital structure. This examines the different methods by that a firm obtains short and long term finances by various option sources. The dividend decision is related with question like how much of the profit is to be retained and how much is to be distributed like dividends. The finance manager has to strike a balance among the current requirements of the enterprise for cash and the requirements of the shareholders for a adequate return. The financial management of a huge company is usually the duty of the finance director who may be in place of or as well to the controller. Frequently finance manager and controller are inter-changeable terms and merely one of these two places may be determined in a company. The finance manager while there is a controller also in the organization, is related with implementing the financial policy of the board of directors, preparation of budgets, managing liquidity and administration of budgetary control system as well as managing profitability etc.

Although financial management is termed as a separate area, this function is performed in various countries, as well as India, through the Accountant or the Financial Controller some large organizations though have a financial executive besides the chief accountant. Frequently, finance and accounting functions are clubbed jointly in one person in little organizations.

Posted Date: 4/2/2013 7:00:19 AM | Location : United States







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