Financial management is vital for the overall success of any company. And as it is the job of the financial managers to ensure the proper management of the company’s finances, their role becomes crucial. For example, a financial manager working in the government must be fully aware of the budgeting process, appropriations to be made, and various tax laws and regulations. Similarly, a financial manager in a pharmaceutical company should know about issues specific to their domain, including healthcare finances. An executive finance online course from a reputable institute can go a long way in training young financial managers in various skills specific to their industry.

In this article, we will share the role of financial managers and how it impacts the financial management of an organisation.

The Critical Role of Financial Managers in Any Organisation

Here is a list of essential functions of a financial manager that shows their importance in the successful functioning of any organisation.

1. Control of Finances and Taking Financial Decisions

Financial managers make different financial decisions for the company and control its finances. The role of financial managers has become critical for the sustainable growth of any organisation. They sit with the top decision-making body in an organisation to make financial decisions that have a long-term impact on the company’s financial stability. They use various tools like ratio analysis, profit and loss analysis, financial forecasting, and many more.

The various analyses completed by financial managers gives them a comprehensive view of how efficiently their organisation runs. It also points out those activities that can bring in additional earnings for the company.

The role of financial managers is expanding and becoming more challenging. Furthermore, new tools allow financial managers to accurately identify the strengths and weaknesses of their company’s finances. To understand these new tools and how to use them, they can take an executive finance course from any reputable institution to update their knowledge.

2. Planning of Various Financial Activities

One of the many roles of financial managers in any organisation is to prudently plan the economic activities and resources of the company to meet its organisational goals. To do this task successfully, financial managers extensively use the company’s available data to understand its priorities and needs. It also gives them a comprehensive view of the overall economic situation. Based on these criteria, financial managers must make comprehensive plans and budgets to meet the needs of various departments. This crucial function helps them control and balance the cash inflow and outflow, thereby maintaining the company’s financial stability.

Financial planning is critical in removing uncertainties, as various departments know enough funds allocated to manage future challenges. This way, financial planning ensures enough funding to continue the growth story and provide for future expansion programs. While planning for the finances of a company, the finance manager has to look at the company’s short-term and long-term financial needs.

To understand how financial planning and control is done in big and small organisations, you can ask your financial manager to take a short-term executive program in finance offered by a reputable institute. It will help them update their knowledge and learn about new effective methods to manage the company’s finances better.

3. Capital Management

Managing capital is also a crucial element of financial management. The financial manager has to make an accurate estimate of the company’s capital requirement at regular intervals. Furthermore, they must fix their company’s capital structure and composition and select the right funding source to fulfil its capital needs. This function is vital, as it effectively ensures the overall cash flow requirement for a company’s smooth operation. This is hugely beneficial as it lets companies quickly pay off their day-to-day expenses and short-term financial liabilities.

Capital budgeting is done to keep a balance between the assets and liabilities of a company. This is extremely important as it allows the company to fulfil all its financial commitments without negatively affecting its day-to-day functioning. Capital budgeting ensures that no unwanted expense happens, which in turn helps improve the company’s financial health. Furthermore, it allows the company to make small operational changes in procedures to improve its earnings and work efficiently. As the financial sector is changing rapidly, you must ensure that your financial managers keep pace with these rapid changes. Therefore, you should ask them to attend an executive finance program from a reputable institution and learn about the new methods and techniques used in this field for better management and control of capital.

4. Financial Resource Provision and Utilisation

Proper financial management is essential to guarantee that the financial resources of a business are invested in the correct and most efficient way. This will help to make the company sustainable, profitable, and viable in the long run. The marketplace is highly competitive, so financial managers must ensure that funds for critical business operations and projects are always available. Additionally, they also have to ensure that the available funds are used in the best way to get the most benefit for the company.

Financial managers must invest the available funds in current and fixed assets, and must allocate funds such that they are not blocked excessively in inventory, cash, or debt books.

You can ask your financial manager to attend an executive finance online course to learn the latest financial resource provision and utilisation methods. However, ensure that the course your manager is taking is offered by a reputable institution.

5. Managing Cash Flow

A company must have adequate working capital and cash to meet its operational expenses and cater to emergencies. The financial manager monitors the accounts receivable and payable so that sufficient money is always available to meet any short-term liabilities. This makes the role of a financial manager crucial in any business.

If you talk to experts, they will confirm that many companies go bust as they cannot manage their cash flow properly. In a company, if the expenses are not controlled and they outstrip earnings, it will lead to a cash shortage. Some companies, especially those in real estate development, face the issue of a cash crunch as their daily cash outflow is relatively high. Similarly, businesses expanding rapidly may also face cash flow disruptions. To ensure that you truly understand how to manage the cash flow in your business, you should take short finance courses online from a well-known institution.

6. Utilising the Surplus of the Company

Your financial manager’s job is to decide how your business’s profits or surplus should be utilised. They decide whether the company should pay dividends and, if they do, how much they should pay. The financial manager also determines how much of the profit should be retained by the business and ploughed back into it to expand it further.

All these decisions will depend on how your company continues to earn. One part of financial management is to check whether there is a need for cash for any expansion plans. The financial manager has to consider the price at which the company’s shares are selling before deciding what they want to do with the surplus generated by the company. You can seek admission into one of the online finance courses a reputed institution offers to learn more about the tools finance managers use to make accurate financial decisions.

7. Financial Reporting of the Company

The financial manager keeps all the essential financial reports of a company and uses this information for forecasting and deciding on various economic activities. Reporting plays a vital role in understanding a company’s financial position and performance. Financial reporting is done periodically; it can either be published annually or quarterly. It informs decision-makers about how much money there is and the cash inflow and outflow scenario for that period.

For reporting, the financial manager uses various financial statements that record the company’s business and economic activity. These reports are vital as they are audited by accounting firms, government agencies, and company accountants. Some of the statements include the income statement, the cash flow statement, and the balance sheet. These statements together give a comprehensive view of the company’s financial position and how well it is performing.

8. Managing the Risk

Any business is inherently risky, and companies face danger from multiple sides. For example, an adverse market condition can lead to dropping sales, or any tax burden can increase the price of a product, which can affect the product’s competitiveness. Financial management tries to forecast these risks and implement plans to help the company mitigate them.

You should enrol in an executive finance online course and upgrade your skills to manage your company more effectively and efficiently.


If you have a good grasp of economics and corporate finance, you can land an excellent job as a financial manager. To improve your knowledge and bring it more up-to-date, you can take a good course in executive finance offered by a well-known institution. A certificate from such a course will significantly help in updating your knowledge regarding the latest rules, regulations, strategies, and financial tools related to financial management. Therefore, plan carefully, choose the right finance program course, and improve your chances of getting a good position in a reputed company.