It Is Vital To Have A Management Strategy
National Internet Exchange of India (NIXI), says that a successful business plan always comes with comprehensive, yet ever-evolving, financial management strategies. How you manage procurement, allocation and the subsequent utilisation of funds and finances will determine how smooth is your cash flow, as well as workflow. Acharya stresses on the importance of having a finance strategy. He says that the purpose behind having a finance strategy is to ensure the presence of an adequate and regular supply of funds towards fulfilling the present and future requirements of an organisation. “The more effective financial management is in my company the more we will be able to maximise the revenue generation and utilisation”, he says. He adds that for a financial management machine to work at its fullest potential, it needs to be well organised. There are a number of steps which have been taken to ensure that financial strategy is as effective as it can be. The main goal driving financial management strategies is the maximisation of the financial value of an organisation. These strategies evaluate financial performance, forecast future financial performance, plan capital structure and manage any other financial activities and decisions that could impact strategic financial decisions.
Adding to this, he says that financial management initiatives are focused on elements such as financial resources, cost structure analysis, profit potential estimation, accounting functions, and so on. The finance strategy modifies itself with the identification of sources, usages, and management of funds. It deals with the alignment of strategic financial decisions with the corporate and business objectives in the organisation to gain a market advantage.
Moreover, financial management is not focused on the short-term; instead, it is a forwardthinking approach wherein long-term growth is prioritised to secure a sustainable financial future. Financial strategies help to check whether the goals are realistic, tackle unexpected challenges and it also helps to understand how the fund is utilised.
Besides these, other aspects of business strategies that financial strategies help, include -- current financial position; identifying any risks to your company’s current financial situation; identifying the need for financing to fund expansions or operations; identifying and setting income goals for the foreseeable future; identifying sources to look into in order to increase income; highlighting the need for new relationships or partnerships needed to achieve financial objectives; establishing the need to hire particular skills needed to attain the financial objectives set; and finding the best balance between spending versus saving
