Financial Management is important because of the role it plays in our economy. We need Financial Management in any business. This helps employers manage their finances in a smart way.
Top 10 Reasons Why Financial Management Is Important:
- It is a scarce skill
Every business needs financial management because it indicates where the business is going. - Financial management tracks, records and manages the finances of a business
This allows employers to make important decisions based on the findings of the Financial Manager. - Employers can make safe financial decisions
It is important that an employee makes good financial decisions because this determines the success of the business. - It can improve the growth of a business
Smart and informed financial management can improve a business. - Employers will know where their business is at and can make changes to the business if necessary
Employers can also think of new and exciting ways to improve and grow their business. - Employers can see where they should and cut costs if it is necessary
For example, cutting costs on the location of the business. Buying a building instead of renting a building. - Employers can plan and predict where to invest their money
This gives employers a better chance of success in their business. - Financial management encourages employees and employers to work well with their personal finances
The more you know about finances, the better you can work on your own finances. - It guides employers on their finances
For example, looking at the profits they have made and the expenses they have. - It ensures that the finances of a company are recorded
This way, employers can determine how much money they are spending.
What Is Financial Management?
Financial Management is the process of guiding the finances of a business. Financial Managers:
- Record
- Manage
- Maintain
- Report
This process is related to any financial matters of a business. For a business to function, financial management is essential, not only to a business but also for everyday living. Each individual has to manage their finances to get through the month.
What Is The Importance Of Financial Management In Our Daily Life?
Financial Management is important in our daily lives because we have to manage our finances to gain property, buy food and even pay bills. If we work hard at improving our finances, the better our standard of living becomes. For example, saving money can bring many positive changes to your life. Here are a few examples:
- Saving money for further studies. Have a look at our courses
- Using your money to improve your living situation
- Making changes to the way you eat. For example, eating healthier means that you need more money. If you manage your finances correctly, you can budget for the perfect eating plan
What Is The Most Important Function Of Financial Management?
The most important function of Financial Management is knowing how to control and make decisions based on the finances that are available. This function is important because the goal of any business is to make money.
The more money a business has, the more successful it will be. As a result, the business owner can expand their company, creating more jobs. This promotes a stable economy. Other important functions in financial management include:
- Financial planning
- Budgeting how finances will be used in the business
- Cash flow management
- Ensuring and recording money
What Are The Benefits Of Financial Planning?
Financial planning is beneficial to any business. Some benefits include:
- To achieve any of your financial goals
- Keeping track of your spending
- Financial planning allows you to improve your standard of living
- It ensures that you are a financially independent individual
- Financial planning allows you to make smart decisions about your finances
What Are The Tools Of Financial Planning?
The tools that are used in financial planning are:
- Budgeting tools
- Business credit cards
- Software related to accounting
- A system that manages payroll, such as Sage Payroll
What Are The Steps In Financial Planning?
The steps in financial planning are simple. If you follow these steps, you can make your financial planning easier:
Step 1
Determine what your current financial circumstances are.
Step 2
Determine your financial goals.
Step 3
Find out which expenses are unnecessary.
Step 4
Use wasteful spending as a stepping stone to your savings.
Step 5
Start saving.
Step 6
Never stray away from what your financial goals are.
Step 7
Continue on your financial saving path.
Step 8
Check whether you have met your financial goals.
Step 9
If you have not met your financial goals, try again.
Step 10
Continue the process until you have met your financial goals.
What Is The Importance Of Financial Management In Education?
Financial Management in education is important because you need the knowledge and educational background in financial management to become a Financial Manager. This allows you to make secure financial decisions for a business.
Our Financial Management Courses
Both our NATED and ICB Programmes have (4) four courses. Each Programme works like this:
- You have to complete the first course in the programme. Start with the first course before continuing with the next.
- Continue with the next course in the same programme until you have completed the entire programme
- Once you have completed the programme, you will receive a National Diploma. This increases your chances of finding employment.
We offer the following Financial Management Courses:
NATED Courses
The Financial Management Diploma Course consists of the following courses:
- Financial Management: NATED N4 National Certificate
- Financial Management: NATED N5 National Certificate
- Financial Management: NATED N6 National Certificate
- Financial Management: NATED N6 National Diploma
Entry Requirements
Here is what you need to qualify for any of our NATED Courses:
- Be 16 or older to apply for any NATED Course
- You must have an Amended Senior Certificate or National Senior Certificate and any Matric Pass Level
- Understand, read and write English
- Study through distance learning
ICB Courses
The following ICB Bookkeeping and Accounting Courses are offered at Bellview:
- Bookkeeping: ICB National Certificate
- Bookkeeping: ICB FET Certificate
- Certified Financial Accounting: ICB National Diploma
- Technical Financial Accounting: ICB National Diploma
Entry Requirements
Here is what you need to qualify for any of our ICB Courses:
- Be 16 or older to apply for any ICB Course
- You must have a Grade 10 Certificate or
- An NQF Level 2 Qualification
- Understand, read and write English
- Study through distance learning
Frequently Asked Questions
Budgeting ensures that you will not use more money than what you planned on using initially. It provides you with a fixed amount of money that you can spend and prevents you from overspending.
Budgeting is not only important for businesses, but it is important for regular individuals at home.
Budgeting has three main purposes:
- It helps you maintain your finances
- It helps you save money
- It helps you manage your finances
The (3) three types of budgets are:
- Activity-based budgets
- Labour budgets
- Sales budgets
Financial forecasting is predicting what a business’s finances would look like if no changes were made, as well as if changes were made. This forecasting is based on many factors, including:
- The economy
- Trends
- Your capital
- Your expenses
Author: Jesmé Africa
Editor: Connor Bergsma
Date Published: May 26, 2022