Duties of a finance manager

simple and understandable explanation about the duties of a finance manager. This is very good for undergraduate student and those who do not have any idea related to financial management

1. 2.2. MAJOR DUTIES OF A FINANCIAL MANAGER
1. RAISING FUNDS
A finance manager needs to find out from where he can raise the funds by looking at multiple
sources of finance, determining the best type of financing and how the funds will be
physically acquired by the firm.
Raising funds is very crucial for the firm’s survival.
2. INVESTMENT DECISION/ CAPITAL BUDGETING DECISION
Finance manager has to think about the investment decision and make the optimum utilization
of the resources for the desired goal of the firm. The investment decision can either be a long
term or a short term decision.
3. PLANNING AND CONTROLLING
Finance manager need to plan and control the overall functionality of the organization related
to finance related matters. He needs to look on the internal condition of the firm such as
determining the level of risk and stability in earnings, the altitude of the management and
managing existing asset efficiently in order to have better plan and control.
Finance managers also need to look on external factors that may affect the organization in
order to have proper planning and controlling. They should look on matters such government
policy related to the firm’s business and the state of the economy of the country
4. CASH MANAGEMENT
Finance managers need to properly manage cash and ensure availability of adequate funds
when are needed. For example Money may be required for promotional expenses and working
capital needs such as electricity payment; hence efficient management of cash is needed to
properly execute these activities according to organization needs.
5. FINANCIAL FORECASTING
Financial forecasting is a prediction (a plan) concerning future business conditions that are
likely to affect a company. It involves looking on historical data in order to provide

2. information about what the financial status of the company is likely to be at some point in the
future.
A manager needs to prepare a proforma financial statement (projected financial statement) to
estimate the future financing needs of the firm and to assess the firm’s forecasted performance
is in line with the company’s targets.
The projected financial statement is going to show the expected assets (current assets and
fixed assets) and liabilities like expected accrued expenses that a firm is going to have in the
future.
6. UNDERSTANDING FINANCIAL MARKETS
A manager needs to understand the financial market since financial markets provide for the
efficient allocation of resources within the economy. The financial markets provide businesses
and governmental entities access to capital