Financial management is an activity which consists of planning, auditing, budgeting, controlling, making a living, and depositing funds owned by a company or organization.
Economists give their views on the concept of financial management, including:
Bambang Ryanto
Financial management is an activity carried out by an economic / company institution that is closely related to the business of obtaining funds needed at the smallest cost with favorable requirements and efforts to utilize funds effectively and efficiently.
Liehman
Financial Management is an effort to provide money and utilize it to obtain assets (assets)
James Van Horne
Financial management is any activity that is closely related to the efforts of obtaining funds and manageralizing assets (assets) with overall objectives
Development of Financial Management
Financial discipline has evolved from a descriptive discipline to become more analytical and theoretical. This development is due to the many contributions of economists in the formulation of financial theories such as the concept of capital budgeting by incorporating theories about money interest (time value of money), portfolio theory and others.
Financial Management Function
The functions of financial management include:
Financial planning
The first stage is financial planning. Some things that need to be done are compile income plans, arrange expenses, and other activities within a certain period.
Financial Budgeting
In an effort to financially budget, what needs to be done is to make income and expenditure details.
Financial Management
In managing finances, the maximum use of funds from economic institutions / companies is done in various ways that might be done
Financial Search
At this point includes efforts to find and exploit sources of funds that are used for operational activities of the company.
Financial Storage
In an effort to save money, what is done is to collect company funds and store / secure these funds.
Financial Control
Financial control is evaluating and improving financial systems that have defects in them.
Audit
Financial audits are carried out by internal auditing of the financial system implemented by the company in anticipation of irregularities.
Finance report
Financial reporting is very important as an effort to provide information about the financial condition of economic institutions / companies, especially as evaluation material.
Financial Management Objectives
The purpose of financial management is to optimize with regard to the company's value. If in the future the company's assets will be sold, the price can be adjusted to the ideal price.
Principles of Financial Management
Financial management is one of the most essential parts in all matters relating to economic activities. Technically, financial management is imbued with various principles. This principle is referred to as the principle of financial management. Some of these principles include:
Consistency
Consistency is a principle in conformity between the system and financial policies within the company in terms of standardized and standardized planning. Inconsistent financial approaches will potentially lead to undesirable things such as financial manipulation and such.