Finance Manager- Functions

The changed business environment has increased the role of finance manager. Increasing pace of industrialization, rise of larger-scale units, innovations in information processing techniques and intense competition has increased the need of financial planning and control.

Financial forecasting and planning
Finance manager has to estimate the requirement of funds to acquire assets. The decision has to be taken keeping in mind both the fixed capital and working capital requirement. How to acquire such funds and when to apply the raised funds is the crucial role of a finance manager.

Acquisition of funds
Funds can be raised from many sources such as banks , equity market , financial institution etc. Main role of the finance manager is to look out for the most cheapest source of finance after reviewing the pros and cons of each source that is available.

Investment of funds
Funds should be used in the best possible way. It should always be kept in mind that return on investment must be always higher than the cost of acquisition.
After the funds have been acquired it is the role of finance manager to allocate it to various areas of requirement. Such areas may be fixed assets, working capital or investment in other sources.
A finance manager has to keep the principles of safety, liquidity and soundness while investing funds.

Helping in value decision
Merger and acquisition has become a common phrase in this competitive market. A finance manager must help the management in such a valuation and must understand various methods of valuation of shares and other assets so that correct values are arrived at.

Maintaining proper liquidity
Maintaining liquidity is very essential for a business concern to finance short term capital need, day to day working requirements and to take advantages of sudden market opportunities. Finance manager has to take decision on the degree to which liquidity has to be maintained so that funds are not kept idle.