FINANCIAL MANAGEMENT

“IDENTIFY THE ROLE & FUNCTIONS OF FINANCIAL MANAGER”

PROJECT REPORT

SUBMUTTED BY:

SUMI MURUGAN P K

ROLL NO: 52

2nd Trimester

SUBMITTED TO:

PROF. DEEPAK M

MBA DEPARTMENT

MES College of engineering

MALAPPURAM DT, KERALA

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 TABLE OF CONTENTS

CHAPTER TITLE PAGE NO.

1 INTRODUCTION 3

2 COMPANY PROFILE 10

3 RESERCH METHODOLOGY 12
4 FINDINGS,SUGGESTION AND 14
CONCLUSION
5 BIBLOGRAPHY 18

APPENDIX 19

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 CHAPTER-1

INTRODUCTION

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 INTRODUCTION

Financial management refers to the efficient and effective management of money

(funds) in such a manner as to accomplish the objectives of the organization. It is the
specialized function directly associated with the top management. The significance of this
function is not seen in the 'Line' but also in the capacity of 'Staff' in overall of a company. It has
been defined differently by different experts in the field.

The term typically applies to an organization or company's financial strategy,

while personal finance or financial life management refers to an individual's management
strategy. It includes how to raise the capital and how to allocate capital, i.e. capital budgeting.
Not only for long term budgeting, but also how to allocate the short term resources like current
liabilities. It also deals with the dividend policies of the shareholders.

As far as a company is concerned, the role of a finance manager is inevitable.

Financial managers are responsible for the financial health of an organization. They produce
financial reports, direct investment activities, and develop strategies and plans for the long-
term financial goals of their organization. Financial managers work in many places, including
banks and insurance companies.

Financial managers increasingly assist executives in making decisions that affect

the organization, a task for which they need analytical ability and excellent communication
skills.

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IMPORTANCE OF THE FINANCIAL MANAGER

The financial manager is responsible for supervising and handling the company’s
financial reports, investment portfolios, accounting and all kinds of financial analyses. It must
also supervise the enterprise’s cash management strategies in addition to the regulatory
framework.

It must adequately manage the organization’s cash flow by supervising balance

sheets, profit and loss statements and the cost and revenue model.

Job responsibilities also include the development of an efficient financial strategy,

which must clarify all of the organization’s financial aspects, while meeting the objective of
minimizing costs and maximizing profit. He is also in charge of budgetary decisions and of
developing a financial operating plan.

The Financial Manager must be skilled in the technical aspects of all financial decisions made
by the company. There is also importance of having a professional in-depth knowledge of legal
regulations and statutory litigation. The key elements of financial management follow below:

 Financial planning
 Financial control
 Financial decision-making

Financial Planning

Management needs to ensure that enough funding is available at the right time to meet the
needs of the business. In the short term, funding may be needed to invest in equipment and
stocks, pay employees and fund sales made on credit. In the medium and long term, funding
may be required for significant additions to the productive capacity of the business or to make
acquisitions.

Financial Control

Financial control is a critically important activity to help the business ensure that the business
is meeting its objectives. It is a method designed to answer the following financial concerns
that a company may have, such as:

 Are assets being used efficiently?

 Are the businesses assets secure?
 Does management act in the best interest of shareholders and in accordance with
business rules?

Financial control tools

 Cash controls: systems for managing cash amounts.

 Bank controls: systems for making sure that the bank account cannot be misused.

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  Budgeting and accounting controls: systems that provide sufficient information or
manage the activities of the organization.
 Purchase and authorization controls: making sure that different people are involved at
each stage.
 Management controls: extra checks made by management.
 Physical controls: keeping property and equipment in good order and secure; and
guidance on the personal use of items owned by the organization.

Financial Decision-Making

The key aspects of financial decision-making relate to investment, financing dividends and
asset management. For example, investments must be financed in some way, however, there
are always financing alternatives that can be considered. For example it is possible to raise
finance from selling new shares, borrowing from banks or taking credit from suppliers.

TYPES OF FINANCIAL MANAGERS

Financial managers deal primarily with the finances of a company, making decisions regarding
the company's money and monetary transactions. The financial manager's other duties
depend on whether he is a cash manager, a risk and insurance manager, a branch manager, a
credit manager, a treasury and financial officer, a controller or a CFO (chief financial officer).

Cash Managers

A cash manager is in charge of cash receipts and disbursements. He ensures the accuracy of
cash receipts and oversees cash transactions. If the company is low on cash, he may ask for a
loan. If the company has a surplus of cash, he may invest the cash funds elsewhere.

Risk and Insurance Managers

Risk and insurance managers have the same goal -- to minimize the company's risk; but the
two managers use different methods by which to achieve this goal. Risk managers are in
charge of minimizing the company's risk to factors that are a threat to their ability to operate,
such as natural disasters. A risk manager must also use methods to help the company benefit,
or remain unaffected, by changes in the prices of other currencies or commodities. On the
other hand, insurance managers purchase insurance policies for the company to minimize the
company's risks against threats such as lawsuits.

Branch Managers

Branch managers oversee the operations of a branch office. This includes hiring employees,
approving loans or credit lines, assisting customers or developing a relationship with members
of the community to help increase business. Branch managers also attend meetings with other
company executives to discuss current and future financial objectives.

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Credit Managers

Credit managers establish credit standards for the company. This includes deciding who the
company will issue credit to, developing the company's credit rating criteria, determining the
maximum amount of credit a given individual or company may receive and deciding the
method by which the company will collect a past due account.

Treasury and Finance Officers

Treasury and financial officers manage the company's budget and make adjustments to the
budget as needed. These managers are also in charge of matters such as investment funds
and fund raising. If a company expands or merges with another company, a treasury or finance
officer will coordinate the expansion or merger.

Controllers

The controller is usually in charge of the accounting department, the budget department and
the audit department. The controller oversees the accurate completion of accounting
statements. At times he is required to prepare statements that outline the company's financial
situation for a government or regulatory authority.

Chief Financial Officers

The chief financial officer is a top executive, and he is the highest level financial manager. He
is held responsible for the all of the financial reporting within the company, so he must ensure
its accuracy. CFOs and other top executives are among the highest paid workers in the United
States, reports the U.S. Bureau of Labor Statistics.

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ATTRIBUTES OF A HIGHLY SUCCESSFUL FINANCE MANAGER

1. Be honest, trustworthy and high in integrity

This is probably the most sought-after attribute in all financial sectors. Dishonesty can be
detrimental to any company’s financial health and the Finance Manager’s reputation. The only
way to change a company’s bad financial status is to be honest about it. There really is no
reward in sugar-coating financial figures.

2. Be strategy-minded with the ability to understand all aspects of the business

Financial management encompasses all facets of a business. From payroll to cleaning, it all
impacts the financial status of a company. So, it goes without saying that a great Finance
Manager needs to have an understanding of everything happening inside of the company. It all
costs money...

3. Be proactive

A good Finance Manager needs to be able to assess risks and take precautions before there is
a negative impact on the company. You need to be proactive when making financial decisions,
as leaving it too late or not responding will have no benefit to a business.

4. Be analytical

This attribute is more of a requirement than a desired attribute. Your job as a Finance Manager
is to analyze figures. You have to be analytically-minded in order to be a success in the
industry.

5. Be team oriented

As a Finance Manager, you will have to work with a group of other accountants in the finance
department. Finance jobs of this nature require you to collate and analyze all of their work. It is
therefore essential that you are able to work as part of a team and have great interpersonal
skills.

6. Communicate well

A good Finance Manager should be able to communicate well on all levels. You need to be
able to communicate relevant and timely financial and management information effectively. A
Finance Manager’s job is to analyses KPI’s, charts and graphs. The findings should be
communicated clearly and efficiently to other members of the organization.

7. Effectively coach and mentor

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Financial management requires you to be able to coach others to streamline business
processes. Proper coaching techniques will increase effectiveness, broaden the employees’
thinking, identify strengths and development needs, and achieve challenging goals.

8. Be a decision-maker

Finance Managers need to be able to make important financial decisions in order for the
company to respond well to competitive challenges, new projects, financial setbacks, and
shareholder demands. Shareholder value is of utmost importance as this where companies
generate most of its capital from.

9. Thoroughly understand GAAP and corporate taxes

GAAP stands for “Generally Accepted Accounting Principles” and encompasses all accounting
principles, standards and practices that need to be adhered to in order to produce relevant
financial documents. A Finance Manager’s understanding of these practices will ultimately
affect the compiling of financial reports.

10. Be a strong, multi-disciplined financial generalist

A great Finance Manager needs to be technical enough in all aspects of finance to work well
with outside specialists and spot problems or opportunities. They need to have knowledge of
everything concerning finances, from mergers and acquisitions to employee benefits and risk
management.

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 CHAPTER-2

COMPANY PROFILE

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 COMPANY PROFILE

BENCO COCONUT OIL

Benco Coconut oil brings the goodness and purity of coconut oil from God's own
country. In an effort to counter adulteration in the coconut oil market and to make pure
coconut oil available in the country, Akbar Group ventured to the Food & Beverage industry by
launching the company – Benzy Food & Beverages Pvt. Ltd.

Benco coconut oil is a trusted brand name that is synonymous with purity. This product
has received the AGMARK approval from Ministry of Agriculture, Government of India. The
Company has also obtained ISO 9001-2000 certification for its management and
manufacturing process.

Benco coconut oil is manufactured in the modern plant at Ponnani, Kerala under
stringent hygienic conditions. Best quality Malabar copra (dry coconut) is fed into the oil
extraction machines through conveyers. Benco coconut oil is so pure that it can be used for
various purposes like cooking, body massage and application on hair and scalp. It can also be
used in open lamps as it does not result in a smoky flame.

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 CHAPTER 3

RESEARCH METHODOLOGY

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RESEARCH

Research means a search for facts- answer to questions and solutions to problem .It is
a purposive investigation. A research can be defined as a scientific and systematic search for
pertinent information on specified topic

RESEARCH METHODOLOGY

This study is done by conducting a survey with the manager

OBJECTIVES OF THE STUDY

 To identify the role of financial manager
 To identify the functions of financial manager.

SOURCE OF DATA COLLECTION

PRIMARY DATA

Primary data will be collected through structured questionnaire which may be filling up
by respondent

SECONDARY DATA

Secondary data will be collected from various books, journals, and internet

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 CHAPTER 5

FINDINGS, SUGGESTION AND CONCLUSION

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 FINDINGS
The role of a financial manager will vary significantly depending on which industry
they are in, but generally, they perform duties that support and inform the company financially.
Financial managers complete data analysis and report to senior managers with advice on
profit- optimization. Financial managers are accountable for the financial health of a business.
In addition to preparing statements, business activity reports, and forecasts, financial
managers also oversee financial compliance-making sure that legal requirements are met.
Some serve in supervisory roles over other finance department employees. They also analyze
costs and look for ways to reduce expenditures. They do whatever is needed to promote the
financial success of their organization.

ROLES

o Heading finance functions involving determining financial objectives, designing &

implementing systems, policies & procedures to facilitate internal financial and process
controls.
o Formulating annual budgets and conducting analysis to determine the cause of
difference between projected & actual results and implement corrective actions.
o Overseeing the preparation of MIS reports and the reconciliation statements as well as
undertaking the analysis to assist top management.
o Monitoring inflow / outflow of funds and taking adequate measures to ensure optimum
utilization of available funds.
o Evaluating internal control systems/procedures, preparing reports with a view to
highlight the shortcomings and implementing necessary recommendations.
o Implementing stringent systems/measures to establish and maintain high security
standards in compliance with prescribed statutory norms.
o Conducting Open Forums of the department staff, brainstorming sessions and case
studies.
o Interacting with Ministry of Finance and Ministry of Health, Pharmaceutical Affairs &
Drug
o Control Department to comply with the statutory requirements.

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 SUGGESTIONS

The following are the suggestions to improve the financial management by a finance manager:

1. Have a clear business plan

A business plan will establish where you are and where you want to get to over the next few
years. It should detail how you will finance your business and its activities, what money you will
need and where it will come from.

2. Monitor your financial position

You should regularly monitor the progress of your business. On a daily basis, you should know
how much money you have in the bank, how many sales you’re making and your stock levels.
You should also review your position against the targets set in your business plan on a
monthly.

3. Ensure customers pay you on time

Businesses can run into major problems because of late customer payments. To reduce the
risk of late or non-payment, you should make your credit terms and conditions obvious from
the outset. You should also quickly issue invoices that are clear and accurate. Using a
computerized credit management system will help you to keep track of customers’ accounts.

4. Know your day-to-day costs

Even the most profitable of companies can face difficulties if there isn’t enough cash to cover
day-to-day costs such as rent and wages. You should be aware of the minimum your business
needs to survive and ensure you do not go below this.

5. Keep up-to-date accounting records

If your accounts are not kept up-to-date, you could risk losing money by failing to keep up with
late customer payments or not realizing when you have to pay your suppliers. Using a good
record keeping system will help you to track expenses, debts and creditors, apply for additional
funding and save time and accountancy costs.

6. Meet tax deadlines

Failing to meet deadlines for filing tax returns and payments can incur fines and interest.
These are unnecessary costs that can be avoided with some forward-planning. Keeping
accurate records saves your business time and money and you can be confident that you’re
only paying the tax you owe. Therefore, it’s important that you meet your obligations.

7. become more efficient and control overheads

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Is your business operating at its most efficient? Saving energy and therefore money can
happen by implementing changes in behavior and using existing equipment more efficiently.
It’s one of the easiest ways to cut costs. Areas to look at in an average office include heating,
lighting, office equipment and air conditioning.

8. Control stock

Efficient stock control ensures you have the right amount of stock available at the right time so
that your capital is not tied up unnecessarily. You should put systems in place to keep track of
stock levels – taking control of this will allow you to free up cash, while also having the right
amount of stock.

9. Get the right funding

It is essential that you choose the right type of finance for your business – each type of finance
is designed to meet different needs. Smaller businesses usually rely more on business
overdrafts and personal funding but this might not be the best kind of funding for your
company.

10. Tackle problems when they arise

It is always very stressful facing financial problems as a business, but there is help and advice
available to help you tackle them before it gets too much to handle so seek professional advice
as soon as possible. There are also some initial steps you can take to minimize the impact
such as tackling priority debts first and assessing how you can improve your cash flow
management.

CONCLUSION
The role of financial manager varies significantly depending on the size and complexity of an
organization. For example, in larger organizations you could be undertaking focused activities
such as strategic analysis that helps senior managers to make the best decisions. That could
include interpreting financial information and predicting future trends. In smaller organizations
you can expect to have a much broader range of responsibilities, perhaps even managing the
entire finance function. Some financial managers even go on to oversee cross-function teams
of IT and administration staff as well. Financial manager is a crucial role in any organization,
irrespective of size. Key skills that will help you are strategic analysis, relationship
management, decision-making and communication.

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 BIBLIOGRAPHY

 www.badralsamaahospitals.com
 www.courses.lumenlearning.com
 www.managementstudyguide.com
 www.yourarticlelibrary.com
 www.wikipedia.org
 www.study.com

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 APPENDIX

QUESTIONNAIRE

1. What are your roles as a Finance Manager in benco?

2. What are your responsibilities as a Finance Manager in benco?

3. What are the highlighting events or factors you have undergone in your career as a Finance
Manager?

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