At its core, financial management is the practice of making a business plan and then guaranteeing all departments stay on track. Solid financial management allows the VP or CFO of finance to offer data that supports creation of a long-range vision, informs decisions on where to invest, and yields insights on how to fund those liquidity, investments, cash runway and profitability.
Joseph Stone Capital says that a financial management system mixes several financial functions, such as fixed-asset management, accounting, payment processing, and revenue recognition. By integrating these key components, a financial management system guarantees real-time visibility into the financial state of a company while facilitating everyday operations, like period-end close processes.
Financial management offers the foundation for three pillars of sound fiscal governance:
- Decision-making or assisting business leaders decide the best way to execute on plans by offering up-to-date financial reports and data on relevant KPIs.
- Strategizing, or recognizing what needs to take place financially for the company to attain its long – and short -term goals. Leaders need insights into present performance for scenario planning.
- Controlling, or guaranteeing each department is contributing to the vision and functioning within budget and in alignment with strategy.
With efficient financial management, all employees know where the company is headed, and they have visibility into development.
Digital financial management can bring several benefits to businesses. One of the vital benefits is that it eradicates the need to print and stock up paper documents.
- With digital financial management, you can forget never-ending piles of paper. Many common tasks can be performed faster or even automated altogether. Receiving and sending invoices is a perfect example of such tasks. You no longer have to send invoices by post or spend time opening envelopes. Everything can be done with the click of a mouse. This means that you can pay attention on more important tasks, and it also helps to decrease costs.
- A financial management system is with you everywhere you go. You can perform everyday tasks and check reports when and where it suits you. All you need is an internet connection and a computer or mobile device. Many tasks can easily be done on a smartphone. At the same time, outsourcing financial management tasks to your accountants is also simpler.
- Digital systems allow flexible collaboration and communication with your accountants. Different tasks can be modified and reassigned easily. Digital channels offer suitable, flexible means of communication. You can communicate face to face, by email or phone, or via video conferencing.
Joseph Stone Capital says financial management helps to make mobile working possible. When all the necessary information and tools can be accessed anywhere, there is no need to bring everyone together in the same place. This opens up new opportunities for managing work and allows for the organization of work according to the needs of individual employees. This can considerably improve welfare and job satisfaction.