The Essay On Financial Management Skills In Business Is Crucial.

Concept of Skill and Competence

Different levels of skills have large effect on economy for employers, employees, individuals and entire national economics. The concepts of skill are not yet clear to the social scientists and the meaning of it is also unclear. De Oliveira (2017) pointed out that, different things are put forward in a discussion while making clear of the concept as well as meaning of skill. Mujtaba (2013) thinks that, personal quality is called a skill, which has three features like productive, expandable and social. Productive is the use of skill and can be ignited by ongoing trainings. Skills are also socially determined.

De Oliveira (2017) pointed out that a competence is a bit different thing that can be defined as the capacity to use and apply one’s skills, knowledge and ability to handle critical work situations and problem identifying as well as solving capacity. Level of skills and knowledge is specified by competencies.

In order to develop economic progress, skill is highly important and the meaning is needed to be clear. Financial management skill is important for a manager and basically to run a business, financial management is the centre of it. Brigham & Ehrhardt (2013) commented that tracking performance of business as well as cash flow and plan development all are affected by this skill that a manager is needed to have. This skill will help the manager to utilise opportunities.

For any kind of management post in a business, financial skill is the most important to have. Through the business life, a business operator is needed to have financial skill, whether the business is just started or the business is highly established or the business is thinking of taking final exit. With the change of the business market, demands and development of business, evolving management needs can be seen. In a position, where an operator is running a business ultimately gets satisfaction. Hendriks (2013) said that being finance accountant is the aim of some for which, finance management skills are highly necessary to have. Day-to-day business management is something that needed to be operated by all employees of the organisation.

The role of finance management is to operate business management, planning of broader strategic development. Senior finance management’s role is to point out the places where the business has to be focused on and analyse the current business situation and how to reform the strategies to be matched with the current needs of market of competition. Brigham & Ehrhardt (2013) commented that in an organisation, the responsibility of finance management is to understand the business market demands and to plan in accordance with such demands.

Role of Financial Management in Business

To make light of the costly mistakes, it is necessary to face organisational issues to catch new opportunities and to develop an action plan on virtue of own intelligence and opinion.

At starting point, financial management’s skill enables a financial accountant to operate effective administration, cash flow and compliance. Morden (2016) thinks that, financial skills are helpful for tracking as well as measuring performances. Identifying problems falls under the list of financial skills. Not only, identifying problems, but also identifying new opportunities is the role of finance management.

As a finance manager, importance of this area of management is to be understood. Finkler et al. (2016) stated the fact that delegating tasks to internal employees as well as outside experts is the role of a finance manager but keeping eyes on the financial capacities of an organisation is the responsibility of a finance manager but the goal will be to take forward the financial progress of the business organisation.

Rosemann & vom Brocke (2015) think that, the primary focus of a finance manager is needed to be increasing revenue or to focus on the growth of revenue and the profit margin of an organisation. In the case of self-funded enterprise, the main agenda of a finance manager is to raise profit and make money. The manager is needed to focus on the cash flow that can often be crucial. Mac Innis (2013) commented that investment in various parts like in importing, in telecommunication, cloud computing etc has to be done by every enterprise and the financing skills enable an employee to think of putting right amount of resources in right places. Accessing KYP or Key Performance Indicator often demands investment on automation. On the contrary, Capriglione (2014) thinks that budgeting is the main role of the finance manager. Charging, accounting and planning are the skills of financing that a finance manager or an accountant is needed to have. Different chargeback models are needed to be learnt in the finance management trainings.

To sharpen Finances Management skills, employees have to learn cost drivers, planning, accounting, budgeting, as well as chargeback. These skills can make a finance manager successful in the career. The difference is needed to be understood between costs and revenues in finance management career. In the courses of Finance Management, a student learns Return-on Investments, Value-on Investments; understanding of expenditure, cost et cetera but the implementation in orgainsational interim is the toughest thing to do. Brown (2014) thus thinks that keeping eyes on right places and to identify the exact problem areas is the key skill of Finance management. In social science, this word skill has a variety of meanings. Ability, talent, aptitude, knack and competence are included in the list of meanings of skill.

Skills Required for Effective Financial Management

Skills of Financial Management help managers to understand financial management’s importance, to know that recording of data is essential. The skills in the field will also enable the employee to learn about the availability of online and software resources for Financial management.

Finance expert or a finance manager in a business organisation, is a desired position and to get an successful position in the post, an employee is needed to have understood different types of resources or financial options that the employee can have. A financial expert of an enterprise is the one who is needed to have a clear idea about the need of financing of a company for developing a well designed business plan. To be a finance expert, only cash providing in right amount and place in a business organisation is not at all enough. Block (2017) thinks that reducing risk as well as minimising cost is highly necessary to be listed as a finance manager’s role and so related skills are needed to have.

Hendriks (2013) put emphasis on that a professional expert of financing is needed to understand how the personal risk of financing can be reduced and how to avoid losing cash from their own. On the contrary, () thinks that personal financing plan is required to be improved so that it could be calculated that how much money will come in the pocket and there only calculations and well designed plan is needed.

Mujtaba (2013) personally believe that financial strength is one of the important things for fetching success in this career where a finance expert is most importantly needed to be sure that less successful organisation can be made successful in financing by the financial expert. 

The ability of a finance manager will determine that if more investment for business growth is possible or controlling cost is more necessary at that juncture. De Oliveira (2017) thinks that often generating cash for a business enterprise becomes more necessary and important than to have another investments.

De Oliveira (2017) said that a qualified business expert in financing, can tell the amount of financi8ng a company needs and predict how much cash flow is needed. A financial expert can predict the growth that can come in future in accordance with the input of financing is invested in the company. According to Mujtaba (2013), disappointing sakes and similar negative events can harm the business and so the skills of finance management can help an employee to have an idea about the impact of such events. Capability to use financial tools like measuring output on capital enable the finance expert to compare profitability with invested financing cost.

Sources Cited in the Article

Conclusion

If the financial control is tight, then supplier relationship is strong, then a finance manager or finance expert can easily avoid the extra financing needed in an enterprise. Maximum borrowing can be avoided by planning a long term and uncertain project. There are some similar or related things that should be analysed by a finance manager. A finance manger is a desired post for which an employee must be skilled. A finance expert should be skilled in return-on-Investment, cost drivers, value-on-investments, budgeting, accounting and many other things like problem solving, having idea about bad impacts, predict to future growth and strategy development. The management’s role is to understand both needs of customers and organisation and to think ways of how to be one step forward from the competitors and the ways to raise necessary financing in the market. The candidates who want to be support directors, desktop managers should also have financing skills.

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