The Role of the Financial Manager and the Function of Money
The role of the financial manager is to oversee and direct the financial operations of a business. In addition to ensuring the financial health of the organization, the financial manager may also be responsible for budgeting and forecasting, developing financial plans and strategies, managing cash flow, and providing financial analysis. The financial manager is typically a key member of the executive team, and is accountable for making sure the organization meets its financial goals (The Balance SMB, n.d.).
While the primary function of money is to serve as a medium of exchange. Money allows people to purchase goods and services without having to barter directly. Money also acts as a store of value, allowing people to save for future purchases and investments. Money also serves as a unit of account, providing a standard measure for the valuation of goods and services (The Investopedia Team, 2022).
Therefore, according to The Balance SMB (n.d.), the financial manager plays an important role in the effective use of money. The financial manager must ensure that the organization’s resources are allocated in the most efficient manner to meet its financial goals. This includes developing and implementing financial strategies, budgeting, conducting financial analysis, and managing cash flow. The financial manager must also be able to identify and mitigate financial risk, and must have the ability to effectively communicate financial information to other members of the organization.
The financial manager must also have a comprehensive understanding of the financial markets and how they work. The financial manager must be able to interpret financial data and develop strategies that will maximize the organization’s return on investment. The financial manager must also ensure that the organization is compliant with all applicable laws and regulations, and must be able to identify potential areas of financial risk (The Balance SMB, n.d.).
In conclusion, the role of the financial manager is to oversee and direct the financial operations of an organization. The financial manager must have a comprehensive understanding of the financial markets and how they work, and must be able to develop and implement financial plans and strategies that will maximize the organization’s return on investment (The Balance SMB, n.d.). The financial manager must also have the ability to identify and mitigate financial risk, and must be able to effectively communicate financial information to other members of the organization. The primary function of money is to serve as a medium of exchange, store of value, and unit of account.
References
The Balance SMB. (n.d.). Finance Manager Role and Responsibilities. The Balance SMB. Retrieved December 20, 2022, from https://www.thebalancesmb.com/finance-manager-role-and-responsibilities-397683
The Investopedia Team. (2022, July 4). Understanding money: Its properties, types, and uses. Investopedia. Retrieved December 20, 2022, from https://www.investopedia.com/terms/m/money.asp
Note:
This article is written based on University of The People Financial Management (BUS 5111) written assignment by Fristy Tania in December 2022
