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“Financial Management is the application of the planning and control function of the finance function.” – Howard and Upton.
Finance is the life blood line of any business. Financial Management is a way and means of managing money, i.e. the determination, acquisition, allocation and utilization of financial sources with the aim of achieving a particular goal and objective of an organization. The prestigious Financial Management degree offered at MANCOSA provides a wealth of opportunities for a student striving towards a career in the Financial sector.
What is Financial Management?
Financial management is a managerial activity that involves planning and controlling an organization’s or individual’s financial resources. Finance is a science of ‘money management’. At a personal level it involves how one spends, saves and invests their money. At a corporate level within an organisation they are tasked to deal with the responsibility of:
- Sourcing and raising capital from investors
- Determine how the money is invested to earn sufficient returns
- Make discerning decisions regarding re-investment of earnings
- Distribute the earnings to the investors/shareholders in the form of dividends
Financial management involves the evaluation of financing and investment decisions. The objective of financial management excludes accounting for profits as profits can be manipulated, ignoring the value of cost of equity and they don’t reflect business risk. The purpose of financial management is to create shareholders’ wealth which is usually measured by the market price of an entity’s shares. Financial management has evolved in order to focus on business sustainability and maximizing shareholder long- term value.
Financial management involves both strategy and purpose which could illustrate a firm bringing in a new financial product into the South African market. The firm’s financial managers would have interacted with a wide range of disciplines. Financial Managers would have for example:
- Studied the feasibility of launching the product including conducting a cost benefit analysis.
- Developed a strategy together with the marketing division to attract customers.
- Identified and negotiated regulatory hurdles such as requirements of the South African Reserve Bank
- Worked with technical teams to ensure that they have the requisite IT systems in place
- Measured the success of the project and suggested remedial action where necessary
- Ensure that the firm has all the necessary cash resources on hand at all times to pay its suppliers timorously
Financial management focuses on creating value for the future, while accounting focuses on historical data. The discipline has a forward looking perspective which allows financial managers to make effective decisions based on a constantly dynamic ever-evolving economic environment.
What’s the difference between Accounting and Financial Management?
Accounting is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information. Both internal and external users such as creditors, investors, analysts, management, owners and investors, management, employees, customers, the government, and the regulators make use of this information as it involves reporting financial information. The standard procedures and rules are used to analyse and interpret the financial statements in a meaningful way.
Financial management is an application of general managerial principles which are applied to the area of financial decision-making in order to ensure that the assets and resources of the company are been utilised effectively. The information obtained from the financial management reports are used mainly by the management of the company and shareholders.
Accounting is a necessary input for the financial management function of any business. Good financial management is important for the effective utilization of economic resources of the organization. Accounting is restricted for the purposes of reporting and summarizing of financial transactions for the external and internal users. Financial management is about planning, directing, monitoring, organizing and controlling of the monetary resources, to achieve the objectives of an organisation. Every person or business is involved in some kind of economic and financial activity. Accounting and Financial management are related to the extent that accounting is an important ingredient for the financial decision making process. They might differ in the treatment of funds with regards to the decision making process. Accounting involves preparing and examining past financial records, whereas financial management involves the planning function which supports the various financial objectives.
Role of the Financial Manager
Financial Managers take the responsibility and accountability of being the engine room for an organization. They are the financial strategists that look at the overall well- being of an organization. Their responsibilities span across a variety of areas. These include financial planning, preparing financial budgets, ascertaining lucrative cash flows, sourcing and investment of funds, allocating resources effectively and managing the organization efficiently. Financial Managers bring the fruition of an ongoing concern to success.
Financial Managers may wear many hats and may take on the following roles within an organization, namely: Financial Manager, Financial Analyst, Chief Financial Officer, Financial Treasurer, Financial Director, Financial Officer, Financial Administrator, Financial Advisor and many other financial titles.
A financial manager imbues leadership qualities, an agile mind-set, amicable negotiation skills, analytical skills and a vision to anticipate future trends and analysis in the local and global markets of business.
Finance Management Studies with MANCOSA
MANCOSA offers a specialist Financial Management degree that is fully accredited and registered with the South African higher education authority. The Bachelor of Commerce in Financial Management degree delivers a leading edge curriculum relating to financial management. The current relevance of the program modules is continuously being updated to reflect the latest worldwide developments in the financial management sector. This enables graduates to have a deep understanding of the most up to date financial management body of knowledge which enables them to implement the latest best practice in their financial management roles.
The Bachelor of Commerce in Financial management aims to develop specialist financial and managerial skills that equips a student to meet the demand required for financial management specialists and leaders within the financial sector. In addition to a three year major in financial management, the financial management degree also offers students insight into company law, taxation, business management and economics.
MANCOSA has 25 years’ experience in the delivery of higher education and this experience is reflected in the development and use of online educational platforms. All learning material for the Bachelor of Commerce in Financial Management degree is available online and students are able to remotely access this learning material at their own convenience. Online webinars allow students live access to MANCOSA’s academics and all webinars which are recorded and posted online for students to access at any time during their learning journey. Students also have 24- hour access to an academic support online platform as queries and questions can be logged online. These are responded to by MANCOSA’s experienced academics in a timely manner.
Completion of the Bachelor of Commerce in Financial Management degree allows students to progress to a postgraduate program and may register for the Postgraduate Diploma in Business Management. On completion of a postgraduate diploma, it will enable students to register for a Master of Business Administration (MBA) which is consistently ranked as one of South Africa’s top MBA’s.
For those students aiming to begin their learning journey by completing a Higher Certificate, MANCOSA offers a number of options which include a Higher Certificate in Business Management or a Higher Certificate in Accounting. These programs are fully online and the completion of a Higher Certificate will enable students to progress to the Bachelor of Commerce in Financial Management. The higher certificate provides students with introductory foundational knowledge which prepares them for future academic endeavours.
MANCOSA also offers a Bachelor of Commerce in Accounting for those students wanting to progress into an alternative finance related field.
Study Financial Management
MANCOSA offers students numerous avenues of study to choose from in order to pursue a career in Financial Management. A student is provided with an entry level option to follow through their Financial Management studies from a higher certificate level and eventually progressing towards a MBA. The Bachelor of Commerce in Financial Management is your gateway to equip a student to effectively operate in a financial management role within any organization. MANCOSA’s passion in developing and delivering high quality education allows the student to take the opportunity and register for the Bachelor of Commerce in Financial Management today. Contact our call centre and speak to a student advisor who will offer you support during your registration process.Authors: