Monday, June 28, 2010


A financial manager is the individual in a company that is bestowed with the responsibility of ensuring that a company’s finances are in order. To do this, any individual that will act as a financial manager must have indebt knowledge of finance, accounting, management and IT.

These skills are necessary for a financial manager to have so as to have the right mix of skills to wither the storms and weathers of challenging financial management field. Yes, financial management as a field has a lot of challenges that can easily throw anyone off his feet if he or she is not well prepared the challenges of financial management.


Investment function: without investment and expansion, businesses will not thrive. It is by investing that businesses get rooted into the soil of profitability. It is the duty of the financial manager to scout for investment opportunity, appraise the investment opportunity and give the necessary advice. The financial manager employs certain techniques to appraise the already identified investment opportunity. One of such techniques is the NPV (Net present value), the NPV is a capital budgeting technique that financial mangers use to check the financial viability of a project. There are however other non-financial factors that must be taken care of before an investments are finally made.

Financing function: it will not be enough to identify the most financially and non-financially viable investment opportunity if it is not financed. By being financed, I mean if not executed through the injection of finance. Without raising money in the right mix and at the right time, projects will either not be executed or not executed profitably. It is the function of the financial manager to ensure that every avenues of raising money are explored and the cheapest (optimal mix) financial structure obtained and used in a company.

Dividend function: dividend is a way of rewarding investors for putting in their money into a business for returns. Dividend has many significant ranging from signaling to making investors happy. That however is not the theme of this article. It is the role of the financial manger to ensure that the right proportion of dividend is given to shareholders. Dividend policy is a strategic decision that needs to be handled by professionals like financial managers.

Risk management function: business environment is full of risks both financial and business risk. Financial risk is the risk that a business will not make enough to pay its financial obligations as they fall due while business risk is the risk that a business will not make enough out of its business operations. Risk management is one of the most important functions of the financial manager in a corporate setting. This function is more important especially now that we are facing financial hard times.

I hope I have not scared you with the inclusion of risk management as the function of a financial manager. They are not so difficult to handle. You can help yourself by picking any of the books displayed below:

  Search for financial management