How to be an effective financial manager

Cum să fii un manager financiar eficient

How to be an effective financial manager

One of the most important responsibilities of a company is managing finances. One wrong decision and the company could suffer significant financial losses. But also determining the best way to maximize profits can propel the company to the top of the best performing companies.

Management teams often rely on CFOs to create reports and perform financial analysis before making business decisions. That’s why every company needs a very competent financial manager.

Financial management is a constantly evolving profession. New techniques, tools and technologies become available and old ones must be updated or removed. It takes continuous learning to become a very good financial manager, you have a lot to do and never seem to have enough time. Here are some useful techniques that can make financial managers more efficient:

Clear planning

Making clear plans and putting those plans into action with utmost accuracy is the major requirement to achieve anything profitable. For financial managers it is necessary to know the complete work structure and then they have to make plans accordingly which can bring the best level of stability for the organization. Planning should cover every detail regarding the smooth running of the business and its requirements. The financial manager’s first goal is to prepare a chart that addresses any complications that arise in the workflow.

Financial position scan

Daily monitoring of financial progress is very necessary for financial managers to achieve better flow. It should randomly probe every little financial activity of the organization. On a daily basis, the finance staff needs to know the cash available in the bank, the sales made and the updated stock level. The current position of the business should be checked with the planning carried out at the end of each month to get a clear picture of the productivity and its aspects that need improvement.

Maintaining cash flow

Maintaining cash flow is one of the major requirements for a business to survive and grow. Financial managers must provide stability to a business by balancing revenue with time and costs. A business can suffer from late payment by customers. Invoices must be clarified with utmost accuracy and issued quickly to achieve better cash flow. A proper computerized credit maintenance system is very important to keep track of customer accounts. Unsystematic accounting behavior can even lead to loss of money if a financial manager is not clear with any of a client’s records.

Knowledge of the charging system

A financial manager has to be very precise about taxes and their deadlines. Tax returns must be filed and payments must be made before the deadlines to avoid losing money due to penalties and interest. It is better to absorb such small losses in planning so that they can reveal better results for the organization, relevant to the development and appreciation of its market value. The status of a company rests a lot in the hands of the financial manager. The more fluent the finance manager is in managing taxes, invoices and payments, the more companies gain market value.

Facilitating efficiency

It is the responsibility of a financial manager to check that available resources are making the best use of capital. One of the simplest cost reduction techniques is to make current equipment more efficient. Also, a CFO needs to know and resolve the performance of technical infrastructure such as that of air conditioners, lights, office gadgets, etc. at regular intervals with minimal costs. Inventory control is essential for any business to make the best use of available cash.

Resolution of uncertainties

There are some professional recommendations that can help a business solve these small uncertainties long before they become big problems. Targeting cash flow and inventory management becomes a priority for when any uncertainty arises. Sufficient cash and stable stock can improve the stock. Every company faces typical circumstances, and the financial manager is responsible for making the most appropriate decisions to improve the situation at that time.