Question

what are features of financial management

Answer 1

Financial management is nothing but managing the finances of an organization using management principles. It helps to optimize costs and minimize losses that are avoidable. Features of a financial management are:

1) Management of capital: Regulating the capital invested and assigning them to necessary ones. This will be help to reduce avoidable losses.

2) Financial sources: Selecting appropriate sources for finance is very important. This is important because there may be sources which provide finance at lower interests.

3) Utilizing capital: Using capital invested may seem straight forward. But it is very important to use only the amount of capital necessary. Any unnecessary capital utilized is equivalent to losses in the future.

4) Regulating Debts: It is important to clear debts periodically within stipulated time. This helps to build goodwill in the market. It is very dangerous to delay the payment of debts, because the situation may go out of control. Financial managers regulate these debts and clears them by utilizing the savings done previously.

5) Lowering the risk: Financial management definitely lowers the risk of bankruptcy. Bankruptcy is a nightmare of any organization. All the steps taken by financial managers reduce this risk.

6) Identifying needs: Identifying the needs of an organization is vital, because financial needs must be met as early as possible without much delay.