Finance Management for Smooth Working of Organizations
Finance is something around which any company revolves. From initial setup to flourishing business, everything happens when you know how to manage your finances. In any business, one of the most important aspects is its money management.
Being an indispensable part of any organization, you need to ensure good finances at your firm. However, finance management often becomes difficult for organizations, whether for profit-making or to sustain themselves for long without proper finances.
The efficient management of financial resources is crucial for any organization to sustain and be viable in the long run. Financial management is the trick and the only way for organizations for efficient planning and organization of their financial activity.
Being an entrepreneur and a life coach, I bring two benefits to the table. My vast knowledge and experience of business and my zeal to teach and coach the people around me. My journey as an entrepreneur was never easy.
To be precise, I began my entrepreneur journey amidst a huge financial crisis in our business. Our business had 60 crore loans, banks were after us, and various court cases were filed. My husband could not handle the tough times and took his own life.
After his demise, I decided to handle the family business. While many were shocked, only a few supported my decisions. Most people would mock me saying, “ A woman can not tackle this business.” So much so that my employees would hardly respect me like a box. I took the bold step of entering a male-dominated industry at a time when hardly a few women were in the field.
With so many accusations and backlashes, the only way I could prove everyone wrong was by bringing out our business from this financial debt. My biggest challenge was to bring our business back on track. I worked day and night to manage finances, repay loans, and continue production.
Being a single mother, I had to manage my business, raise my two daughters, and fight court cases single-handedly. No matter how bigger the challenges got, I faced them with grit and determination. Soon, people started accepting me and respecting me in the industry.
Not only did I manage to get my company out of the crisis but made it flourish like never before. Today, our business is doing so much better than one could have imagined. It was because of my financial management and workplace management that I could build a company back from ashes. So, a coach like me understands the value of finances for any organization more than anyone.
What is Financial Management?
Financial management is the strategic planning, organizing, and controlling of finances in an organization or institute. In simple words, it includes applying management principles to the assets of an organization along with fiscal management.
The goals of financial management include:
- Maintaining enough supply of funds for your company.
- Ensure you get a good return on investments.
- Optimal utilization of funds.
- Make sure you save enough for unprecedented times or crises.
- Creating safe investment opportunities for your company.
Composition of Finance Management
The finance management of any organization is made up of certain elements and requirements. These elements come together to ensure proper money flow in your business. The elements that makeup finance management include:
- Financial Planning: The first and primary part of finance management is its planning. This process requires calculating the amount of capital required by an organization. Once it is decided, then its allocation is determined. When you learn finance management, you learn how to determine the capital amount, capital organization, and framing financial policies.
- Financial Control: The second aspect of financial management is financial control. It plays a key role in assessing whether the financial objectives of any organization are met or not. It lets you know the assets being used, secure assets, or any problems faced.
- Financial Decision-Making: The last but critical element of finance management is its decision-making. It involves investment and financing according to the organization. Basically, it is the part where you make decisions about how your organization must raise finance.
Why is financial management important?
Finance management plays a very crucial role in any company’s success. We all have seen many organizations that went bankrupt within years due to lack of financial management.
One such renowned brand was Kingfisher. We all know the disastrous bankruptcy of Kingfisher due to poor financial management. Kingfisher, a premier and world-class airline founded by Vijay Mallaya. The business was flourishing so high that it had 400 flights operating each day. Unfortunately, the airline got surrounded by many controversies that led to its downfall. The financial and operational troubles increased incessantly.
There are many reasons why finance management coaching is essential for your company. Here are a few reasons:
- It helps organizations in financial planning in the right way.
- Finance management assists organizations to plan and acquire funds at the right places.
- Finance management gives you the ability to make critical financial decisions for your company.
- You also understand how you should effectively utilize the funds that you receive.
- The right management of funds helps you in improving the profitability of organizations.
- With the right money management, you can ensure the economic stability of your firm even during tough times.
- Moreover, you can encourage your employees to save money, and further help them in personal financial planning.
The founder of the famous shoe brand, Phil Knight wrote a book ‘Shoe Dog’ in which he shared his journey as an entrepreneur. Through the book he shares the story of his struggles and hardships.
He started dealing in shoes in 1962, but it was after 10 years in 1972, that he got recognition. Building a company at a time where there was no internet and hardly any globalization was a major challenge. From there to this day, the brand manages their finances in a great way.
In fact, Knight would always say that he does not want to get rich and then retire. He wants a steady growth by taking more risks and challenges. Although Knight had to go through many financial setbacks initially, he managed to build everyones favourite shoe brand- Nike.
Why do you need financial management coaching?
If you’re wondering how can your organization benefit from finance management, then there are plenty of reasons. No matter how much you ignore it, but finance management is needed in every organization to enjoy many perks.
- Improves money flow: The first and foremost benefit of finance management coaching is that it helps you create a constant flow of money. Any business, small or large, new or old, needs funds for its smooth functioning. Finance management helps you learn how to keep a check on savings and returns.
- Smart financial decisions and controls: Another reason why you should take finance management coaching is to improve your decision-making. When you make smart financial decisions, your organization can improve tremendously. The right techniques can help you exercise control over finances in the organization.
- Capital Management: When I started my journey as an entrepreneur, capital management was a hard nut to crack. It is critical and challenging to estimate the capital requirements of your organization from time to time. If you’re good at finance management, then determining the capital structure and composition becomes easy. Moreover, you also understand how to choose the funding source for capital needs.
- Learn how to plan finances: Planning finances is a very crucial part of any business. The finance planning determines the fate of your organization. If a person knows the right planning, he’ll not only make profits but also save a good amount. Many financial activities take place in all organizations. Managing all the finances can be an arduous task. If you have the right finance management skills, you can check the overall economic situation, make plans and budgets for the company.
- Utilization of financial resources: How an organization allocates and utilizes their financial resources determine the profits and loss. Finance management can help you invest effectively so that the organization is profitable, viable, and sustainable in the future.
- Risk Management: One of the most important benefits of finance management is how it lowers the risks on the organization. Every organization wishes to have sound financial management. It prepares organizations to forecast risks and put mitigation plans in place. Most of the time, it is the unforeseen risks that can shatter an organization in no time. Organizations at all levels should be prepared financially to face any emergency or unforeseen risk. Managing a business is risky. Being a businesswoman myself, I know interest rates, currency instabilities, fluctuations in product costs, and non-payments are worrisome affairs. Finance management coaching gives you the confidence to manage it alone.
- Profit Planning: The final goal of any business is to earn profit. Finance plays a very important role in spicing up your earnings. It can include finding out the number of profits on products or losses in an investment. Basically, finance management helps you decide on strategic tactics to improve production or discover equitable raw materials.
- Cost Control: One of the most crucial aspects of any organization is cost control, yet it is neglected most of the time. Most people are too busy concentrating on investments and profits that they hardly pay attention to savings. Cash control is very important for the smooth running of the business and during unprecedented times. When you know how to control costs, your profits themselves start increasing. Even if you don’t earn extra profit, you save by cutting costs.
- Tighter Budget Control: One skill that you’ll definitely ace with finance management coaching is planning an effective budget. As an organization grows bigger, the budgeting process also gets more and more complicated. With finance management coaching, you can keep an eye on spending and making necessary changes. It further helps you to minimize budgeting complexity. Budgeting also gives you an overview of what people in your company are doing. An efficient budget can help an organization in the long run. It yields more profit and smart savings.
Why Life Coach Ritu Singal?
When I started my journey as an entrepreneur, I faced many challenges. Being a housewife for so long, I did not bother to know much about finances. However, when I stepped into the corporate world, I didn’t hesitate once from learning.
Learning new and necessary skills is the only way you acquire new skills. I always kept a learning attitude and tried to learn something from someone every now and then. It was my curiosity that helped me learn more about our business each day.
Today, I do not have to look at someone for help. I have the skills and experience to manage everything single-handedly. I always believe in spreading the knowledge that I get or have. Being an entrepreneur and a life coach, I would love to teach money management to anyone who needs help.
I have first-hand skills and techniques that helped my business sustain and flourish so well. When clients come to me with money matters, they always leave more than satisfied. My simple and applied techniques can help you, and your organization make colossal profits and take it to newer heights.
If you’re facing trouble handling cost management, contact us today for a finance management coaching session.