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Why Is Financial Management Important In Business

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Managing Small Business Finances How do small businesses usually able to keep functioning even as the economy changes? There are many ways of using strategies that are effective against the targets of small businesses and in managing the monetary resources in small businesses. How does financial management start? Problems are inevitable, but it can always be overcome by different solutions, that is for the common, while for the businesses these problems existed and they can be solved, but not permanently because we are knowledgeable that problems with money keeps circling around, for the physical or/and digital state of the money are used in everyday life 24/7. In economics one of the common quote is “knowledge is power”, which is the same …show more content…

The article “Why is financial management so important in business?” defines: Financial management of a small business encompasses more than keeping an accurate set of books and balancing a business checking account, because we must know our financial management responsibilities affect all aspects of the business. The article basically tells us why is the importance of financial management have to do in business, which simply applies to the natural flow of monetary resources and maintaining the financial balance in the world. The article points out that some of the many effective ways of financing are: purchasing assets to create income, managing cash flow, lowering expenses, and tax planning. These suggestions helps the small businesses to keep moving forward and at most the people to have successful …show more content…

“5 Finance Management Tips for Small Businesses.” Entrepreneur, 13 Feb. 2016, Accessed 17 Jan, 2018, www.entrepreneur.com/article/270820.
Barrow, Colin. Managing Your Finances. Dorling Kindersley Pub., 2001.
Johnston, Kevin. “Why Is Financial Management So Important in Business?” Chron.com, Accessed 17 Jan. 2018, http://smallbusiness.chron.com/financial-management-important-business-57073.html
“Manage Your Finances.” Small Business Administration, Accessed 17 Jan. 2018, www.sba.gov/business-guide/manage/manage-your-finances-business-credit.
Thibodeaux, Wanda. “Advantages & Disadvantages of Financial Management.” Chron.com, Accessed 17 Jan. 2018,

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When being placed in the role of a manager, it is important to understand the finances of the organization and how to read and understand the recording of finances. It is also important to understand how all the different parts of the records fit together to give us the knowledge of where the business is financially. Knowing also the different responsibility centers related to financial recording and how they function is important as a manager. Once a manager understands what and where items belong on a balance sheet, they will better understand the state that the business is in. “It provides you with a picture of the financial health of your practice or organization on a certain date.”

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