What is meant by Financial Management?

Financial management refers to the strategic planning, management, and control of a company’s financial resources. It encompasses all activities related to the acquisition, allocation, and oversight of financial funds to achieve business objectives and ensure long-term financial stability. Financial management is crucial for maintaining liquidity, profitability, and sustainable growth within an organization.

Typical software functions in the area of "financial management":

Budgeting and Planning: Creating and monitoring budgets to set and control financial goals.
Liquidity Management: Managing cash flow to ensure the company always has sufficient liquidity.
Financial Reporting: Automated generation of financial reports, including income statements, balance sheets, and cash flow statements.
Accounts Payable and Receivable Management: Managing payments to suppliers (accounts payable) and receivables from customers (accounts receivable) to optimize cash flow.
Risk Management: Identifying and managing financial risks, including market risks, credit risks, and operational risks.
Consolidation: Aggregating financial data from various business units or subsidiaries for an overall view of the financial situation.
Tax Planning and Compliance: Assisting with tax calculation and ensuring compliance with tax regulations.
Investment Management: Analyzing and managing investments to ensure optimal returns on capital.

Examples of "financial management":

Cash Flow Monitoring: Daily review of incoming and outgoing payments to ensure the company’s liquidity.
Budget Variance Analysis: Comparing actual expenses and revenues with the planned budget to identify discrepancies and take corrective action.
Capital Raising: Planning and executing actions to raise debt or equity capital.
Debt Management: Managing corporate debt, including repayment schedules and interest costs.
Financial Forecasting: Creating forecasts of future revenues, expenses, and liquidity needs to support strategic planning.
Cost Control: Monitoring and optimizing operating costs to increase profitability.