Concept of Financial Management

 Finance is the life blood of organization. Every organization has less finance whereas he has to perform maximum function so financial management performs an important role to perform all functions of organization in less resource and achieve the goal of organization. 

Definition-

According to Howard and upton

Financial Management is the application of the planning and control functions to the finance function. 

According to M C kuchhal

Financial Management is concerned with the procurement of funds and their effective utilization in business. 

According to me The process of making planning, organising, staffing, dire ting, Controlling in the area of finance this process is called financial management. 

In other words we can say that the process of making policy, rules, regulation, law and procedure for optimum  utilization of finance this process is called financial management. 

Natural

1. It is an important part of management. 

2. It is a continuous activity. 

3. It is central oriented activity of organization. 

4. It belongs to top class management.

5. It is a pervasive function. 

6. It is science art and both. 

7. It also belongs to decision making. 

8. It belongs to other subject like Mathematics, Economics etc. 

9. It is basic activity of finance. 

10. It is a wide and long term activity. 

Score

The scope of Financial Management is very wide. Some of important scope is as below-

1. It ensures to fulfill financial requirement of organization in short, middle and long term. 

2. It arranges finance for the organization from different sources. 

3. It allocates finance to purchase fix and variable assets for the organization. 

4. It distributes dividends among share holders. 

5. It coordinates and controls all the financial activities of the organization for the optimum utilization of resource to achieve predefined goal. 

6. It makes appropriate capital structure of organization. 

7. It ensures proper cash management inside organization. 

8. It invests surplus for the growth of organization. 

9. It involves the application of management principles inside organization in working hour. 

10. It ensures proper working capital. 

11. It ensures liquidity of finance inside organization.