Financial management combines organisation, business objectives, task and innovation management as well as the financial stability and profits of a business, and the list can lead to a convoluted practice. However, it doesn’t have to be as complicated as it sounds. Most financial management plans will break them down into four elements commonly recognised in financial management. These four elements are planning, controlling, organising & directing, and decision making. With a structure and plan that follows this, a business may find that it isn’t as overwhelming as it seems.
The four elements of financial management
Identify the steps that align with the business or individual objectives.
Have you taken the time to properly establish your business goals and objectives? Do you know what your long-term plans are for yourself, your brand and your staff? Each business goal, whether that’s profit maximation, business growth or expansion of services will require financial management and with each goal, there will be steps to get there. This includes financing, budgeting, allocating roles, customer research, and much more. Take some time to agree upon some measurable steps that get you towards your goal.
Ensure each aspect of the organisation is following the established plan
Now you know your steps, do you know that each part of the business is working to achieve the objectives? This isn’t necessarily about cutting costs or determining redundancies, rather it is more about setting appropriate KPIs that can quantifiably lead to the organisational goal. It’s important to make sure any and all staff are aware of the goals and their role in achieving that goal.
Organising and directing
Decide on what resources are necessary to effectively carry out the plan
Resources don’t just refer to material assets and tools. It expands over to staff, roles, budget, funding, technology & software, outsourcing services, and more. You do not want to start implanting a strategy if you don’t even have all the resources at the ready to get the ball rolling.
Make choices after investigating all possibilities and options
Once you have established all alternatives and potential plans decision-makers must choose which alternative is feasible and matches with goals and objectives. Decision making will, in fact, coincide with the rest of planning, controlling and organising, as each element will need to be confirmed before moving forward with the plan.
Implementing financial plans
When handling the complexities of financial management, it’s important to break planning down into categories, aligned with business goals. With the chosen plan you can then decide on software and platforms to support your strategy.
Get the right software to support your goals
If you require an online financial management system, the team at Arrow can help. We provide innovative accounting and software solutions designed to support small to medium businesses in profit maximisation, business management and growth objectives. If you would like to know more about our software reach out to our customer service team on 1800 248 265 or download our brochure to learn more.