What is Financial Management?

Payroll and expenses: Individual paychecks to employees are typically the responsibility of the HR department. However, overall workforce costs roll up to the finance team so they can factor it into their budgets and plans. Finance is also responsible for reimbursing employee expenses, such as work-related travel and meals.
Cash management and forecasting: With money constantly flowing in and out of a business, it’s important for finance teams to look ahead. They must ensure that the company has enough cash to stay solvent for the next quarter, next year—even the next three to five years. In most companies, cash forecasting is typically done once a month.
Tax strategies: Every company must file. taxes; and, like the rest of us, they want to take advantage of as many deductions as possible to prevent overpayment. Some finance teams have tax specialists on staff to manage this. Those that don’t will often outsource this task to an accounting firm.

Financial Management Functions
In smaller companies, one person or a small team of people might perform all the financial management functions for the business. Larger companies typically have teams that are responsible for specific functions. These include:
1. Accounting
This includes tracking, recording, and matching all monetary transactions within the company. The accounting team is often led by a controller or chief accounting officer and aided by accounting software. They often use cloud ERP systems—in particular, financial systems—to perform, record, and report on the company’s finances. Accounting is also responsible for account reconciliation and closing the books (see above).
2. Project management
Projects are a chief source of both income and expenses, especially for professional services, such as engineers, lawyers, and consultants. Finance teams are responsible for allocating budget to a project and overseeing the revenue each project brings in.