Financial and accounting management is an indispensable part of the operation and development of every business. However, small and medium enterprises do not pay due attention to this work, but only focus on business, leading to poor performance results or even bankruptcy. The following article Johnson's Blog This will help you understand better What is accounting and financial management?? And how does it apply to businesses?
Do you understand what is financial management accounting?
Financial Management is a management science that studies financial relationships arising in the production and business process of an enterprise or an organization. Financial management is the management of capital (including cash capital, asset capital and arising financial relationships), in order to help businesses maximize profits.
With the goal of selecting and making financial decisions in order to maximize profits, increase business value and increase competitiveness of enterprises in the market.
In addition, financial management plays an extremely important role and has a close relationship with other activities, it also has some typical roles as follows:
Ensuring adequate and timely capital for production and business activities: this is the biggest role of financial management. Moreover, financial management also plays the role of accurately determining the capital needs for business activities of the enterprise in the short term as well as in the long term and promptly meeting the capital needs for the business activities. of the enterprise through the selection of forms and methods of raising capital.
Use the resources of projects, production and business activities to save and achieve the highest efficiency.
Supervision and inspection of business activities of the enterprise: through the flow of cash flow, financial management helps to monitor and check the activities of the enterprise. Managers will easily detect problems and risks that businesses are facing so that they can propose solutions to overcome them in a timely manner.
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Accounting management is a part of accounting that collects, processes, analyzes and provides economic and financial information as required by management to serve the control and decision making of managers. treat.
With the goal of providing information collected from many different sources for managers to control operations and make management decisions.
In addition, accounting management plays an extremely important role in the operation of enterprises, such as:
- Provide planning and decision-making information: Management accounting information will be collected from both internal and external information for the purpose of helping managers make management decisions appropriate to the situation.
- Help administrators in operating and controlling activities in the business: Based on the situation of using costs or production, ... daily, monthly, which helps a lot for administrators.
- Measuring the performance of individuals and departments in the company: Management accounting information is especially important in the operation of all businesses, and at the same time serves to control, evaluate, measure the performance of all individuals or management levels, departments, etc. in the company.
- Helping businesses achieve strategic goals in the short and long term such as increasing revenue, reducing costs, increasing profit margins, debt management, inventory or increase market share...
>>> See more: What is management accounting?? Objectives of management accounting in business
Financial and accounting management applied in business
Applying financial and accounting management to businesses is indispensable in the operation process, especially for small and medium enterprises - enterprises with limited resources, financial management - accounting helps a lot for managers. management in corporate governance.
But because of the lack of resources, small and medium-sized enterprises often have difficulties, even ignoring financial and accounting management and mainly focus on general intangible business, creating a vicious circle that limits their financial performance. constraints in the development make enterprises operate inefficiently, causing unnecessary losses to the resources of enterprises.
>>>See more: Lap financial plan to be effective in businesses
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