The finance manager is an important and eminent person in any organization. The finance manager has to control all financial activities of the organization like controlling the cash, long term and short term investments, etc., handling the company’s shares, dividend distribution to shareholders, financial assets, and liabilities of the organization. Every organization is measured and evaluated by its performance, based on the profit and loss of the organization. So finance is an important factor in any organization.
The role of a finance manager is to control the overall financial activities within the organization. Mobilization of funds is an important function of a finance manager. It means the finance manager has to plan strategies to receive funds from various sources like public and private financial sectors, shares/debentures, short term, and long term loans from banks and other financial institutions, etc. The finance manager has to take accurate decisions on all financial matters of the organization. He has to take risks while making decisions in any financial matters. (Spiro, 1996, p. 3). The finance manager has the task of distribution of funds in the organization, with so many departments such as production, marketing, selling, purchasing, distribution, personnel, and research and development, etc. The finance manager or Chief Finance Officer has to distribute and make the funds available to all departments. The finance manager has to evaluate the assets and liabilities of the organization – assets like land, building, cash, profit, and other investments; liabilities like loss, creditors, loans, etc. The finance manager has to determine the flow of funds within and outside the organization. (Stern & Chew, 2003, p. 260).
The important role of the finance manager is to exercise control over the use of funds. This is the main task or objective of any finance manager. The finance manager has to maintain the revenue expenditure and capital expenditure. He has to report to top management about funds and cash flows. The finance manager has to collect the day-to-day financial activities of the organization. His report should include details regarding the requirement of funds, source of funds, and availability of funds within the organization. The finance manager has to take the correct action in case of problems in the operation of funds. The finance manager has to maintain a good financial structure of the organization. He has to provide correct information to the top management and sustain the current financial activities of the organization. Every finance manager has to take the risk. Handling finance is a very risky function. (Shim & Siegel, 1997, p. 2).
The success of any organization is dependent on the structure of its finance department. Finance is the major key of any organization and the finance manager’s role is very important. The main role of the finance manager is directing and controlling the financial matters of the organization, including management of cash inflows and cash outflows, monitoring receivables, etc. The finance manager seeks to achieve the right balance between risk and return. The main objective of a finance manager is to increase profit and reduce financial expenses. He has to supervise and motivate the employees within the finance department. A good finance manager should be able to foresee economic boom and recession.
References
Spiro, Herbert. (1996). Finance for the nonfinancial manager. John Wiley and Sons, 3.
Stern, Joel M., & Chew, Donald H. (2003). The revolution in corporate finance. Wiley-Blackwell, 260.
Shim, Jae K., & Siegel, Joel J. (1997). Schaum’s outline of theory and problems of financial management. McGraw-Hill Professional, 2.