What Are the 3 Basic Functions of a Finance Manager? (2024)

FAQs

What Are the 3 Basic Functions of a Finance Manager? ›

Financial managers are responsible for the financial health of an organization. They create financial reports, direct investment activities, and develop plans for the long-term financial goals of their organization.

Financial managers are responsible for the financial health of an organization. They create financial reports, direct investment activities, and develop plans for the long-term financial goals of their organization.

Answer and Explanation: The three functions of managerial finance are investment, financing and dividend functions.

Most financial management plans will break them down into four elements commonly recognised in financial management. These four elements are planning, controlling, organising & directing, and decision making.

Cash management is one of the most important financial management functions. There must be decisions taken regarding what should be done with the money. Financial managers must choose whether they wish to spend on stock upkeep or make payments to creditors, invoices, and present liabilities.

There are three primary types of financial decisions that financial managers must make: investment decisions, financing decisions, and dividend decisions. In this article, we will discuss the different types of financial decisions that are taken in order to manage a business's finances.

Finance involves managing the firm's money. The financial manager must decide how much money is needed and when, how best to use the available funds, and how to get the required financing. The financial manager's responsibilities include financial planning, investing (spending money), and financing (raising money).

The three major functions of a finance manager are; investment, financial, and dividend decisions. Firstly, the investment decision entails determining assets that the firm needs or projects it needs. Under this function, the finance manager makes capital investment decisions and working capital management decisions.

When it comes to managing finances, there are three distinct aspects of decision-making or types of decisions that a company will take. These include an Investment Decision, Financing Decision, and Dividend Decision.

The functions of finance involve three major decisions a company must make – the investment decisions, the financing decisions, and the dividend / share repurchase decisions.

What are the 4 responsibilities of financial management? ›

Typically, the primary goal of financial management is profit maximization. Profit maximization is the process of assessing and utilizing available resources to their fullest potential to maximize profits. This has the greatest benefit for company shareholders hoping for the highest possible return on their investment.

As Finance Manager, your responsibilities will include overseeing end-to-end finance operations, financial planning and analysis, balance sheet reconciliations, looking to make improvements to procedures and controls, as well as ad-hoc projects and requests as and when they come up.

Finance functions cover Investment (allocating funds to assets for growth), Dividend (deciding on profit distribution to shareholders), Financing (raising capital through equity or debt), and Liquidity (ensuring sufficient cash flow for operations).

Managers' roles fall into three basic categories: informational roles, interpersonal roles, and decisional roles.

Top-level managers typically include roles like Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operating Officer (COO), and other C-suite executives.

Top-level management consists of several common positions: Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operating Officer (COO)

There are different types of financial managers, each with a specific focus. Examples include Risk Managers, Credit Managers, and Treasurer or Finance officers.