Question

Explain and relate the role and responsibilities of financial managers at your work place.

Answer 1

In simple terms a financial manager is involved with the efficient management of funds, organizing and planning all monetary matters coupled with effective utilization of the economic resources. The main aim would be to maintain the financial discipline of the firm. At our firm, the roles and responsibilities of a financial manager could be summarized as follows:

Financial Analysis and Interpretation

Organizing the basic financial data of the firm – the revenues, margins, payment terms to the suppliers - and analyzing it to identify the key issues or strengths of the company. Once converted into certain patterns this certainly gives some conclusions for future course of action. This basically becomes a template of decision-making for the higher management. It indeed is a pretty meticulous task and needs to be taken up with true diligence.

Determination of the Funds’ Source

The different avenues from where the funds come in for basic operation is basically taken by the financial manager. It can involve identification of banks for loans or other sources as the company may deem necessary from time to time. Additionally, this involves knowing the customers and the revenues coming in from there and the costs involved in delivering the service or product to the customer.

Capital Budgeting

All high potential expenses or investments are evaluated by the financial manager, the expenditures could vary from a new office space to an investment in a long-term venture. This exercise involves thorough due diligence and risk identification, only after proper evaluation is a decision taken in that scale.

Fund Investment

For the company to grow, a financial manager conducts in-depth study of the investment opportunities and arrive at a possible return on investment (ROI) for the project. Carrying out extensive risk analysis holds the key here, the manager needs to identify all such major risks and highlight the same upfront.

Profit Planning and Control

For a desirable financial outcome, the financial manager sets the margin goals, sales volume and value, estimates the expenses involved and finally arrives at the appropriate bottom line. It is equally important to control the profit, which involves measuring the gap between the target level of profit and the actual level of profit achieved by the firm.