Financial management involves tracking, managing, feeding, and exercising the economics of a business, and it also is concerned with spreading finances throughout an organisation to manage the cost of an operation between all related financial management system areas in an efficient manner.
An organisation's accounting system also exists to record both its financial data and its management information including policies and procedures governing the conduct of financial activities and compliance with applicable financial management system laws.
In addition, the policies and procedures of the accounting system are intended to provide accurate accounting data and generate reports based on that data by summarising and maintaining the financial transactions, timing trends, and relationships among accounts.
Financial management can also be called accounting, financial accounting, accounting administration, or claims management. To better understand financial management, consider a new business. Without a clear, well-structured, and organised accounting and control system in place, you would have a fuzzy business financial structure... not to mention a big problem trying to find the right people for your organisation. Now, think about it from an agile perspective. You have to operate like the few firms your competitors are trying to catch up to - and that means your financial management system have to be organised to match them.
With a financial management system, financial activity is tracked in different ways, with different reporting and analysis programs, and with the ability to look up financial information in various financial management system programs or software. In order to better understand the practical aspects of a professional financial management system, imagine that your company suddenly faced a huge wave of competitors suddenly entering your market. Which would you be better off with - in terms of your organisation's resources or supply and demand - to adapt to these new entrants?
Financial managers and executives have to integrate different types of information that go into a comprehensive financial management system in order to make it functional and effective. In fact, as companies become more aware of the impact of their accounting systems and processes on their success, financial managers are coming to realise that seven key areas are more important than ever. As you look at the five critical areas of the successful implementation of a system, remember that the primary financial management system goal is to provide the right information to the right people at the right time.
Infiltrate finance with a thematic approach. Determine your strategy by considering the main mission objectives pertaining to your financial management system organisation, and identify key measures within your business that need to be measured in order to achieve these objectives.
Integrate operational and accounting processes. Many companies use an appropriate mixture of both operations and accounting processes, with each company utilising their own set of best practices [for example, finance, investment, and expense accountings. But this can be very counterproductive as it limits the resources you can deploy to other areas of the business. It also provides more complex information and data, which provides an insight into the differences between your processes against the companies' financial management system competitors.
Build a secure internal governance structure: Make sure that your accounting system is built within a robust framework that addresses organisational security around data. This means that all users have the provision for the ability to safeguard sensitive materials and information, and that your internal information security management processes address the control you need to ensure that system integrity is maintained for data that others have access to.
Build a secure offshore and cloud infrastructure to support your judgement. Launching your organisation's shift to the cloud is critical, and it can be one of the biggest hurdles for your system, but a proper infrastructure increases the scalable nature of business operations. Customers expect to find all of their financial information and projects online and on demand - and if your company can't provide that, it limits you as a company as a client.
Build a flexible and efficient application infrastructure to support the growth of your organisation. The application infrastructure must recognize that rapid workflows and collaboration are two key requirements to sustained financial management system growth. Also, rapid, process-driven, and low-turnover applications are invaluable for the finance and information professionals in the workplace, and critical for the kind of scalability and long-term accuracy that deal with complex transactions.
Setup the organisational structure by acquiring the appropriate set of tools, procedures, and technology for the future. Creating a financial management system for a very different foreseeable future is the most challenging and the most demanding time of the organisation's existence. Finding the right set of tools to create this financial management system infrastructure is essential to success.
Manage the key operating units of your organisation to become highly efficient and effective. Creating a model of workflow that includes shared and secure data so that internal team members essential to future success can securely access and modify information is key.