Importance Of Financial Administration In Organizations

Importance of financial administration in organizations

Introduction

From the beginning of humanity at all times there was the exchange of goods or services known initially as bartering, after the evolution of different generations, trade was taking shape to technification, development of great organizations that needed knowledge and greater emphasisto administer and apply an analysis framework regarding income versus expenses.

After the continuous development of small merchants to large organizations, they had the need to adhere to greater accounting control, and addition.

Thus, the financial administration is taking shape and great importance, since it allows to manage, control, plan all these systems to make correct decisions when it comes to implementing the organization.

Developing

In small businesses, the administration of accounts and movements is controlled by the accounting department, however, companies with great movement have separated the accounting and financial department, since within this field more than accounting records a financial analyst is necessaryIn charge of planning, analyzing, controlling, the accounting structure for successful decision making for the proper functioning of the business in progress and profitability generation.

Finance have disciplines in purposes such as accounting, where accounting records are made, and financial administration, which basically is responsible for criteria and interpretation of accounts for decision -making.

It also has a wide relationship with the economy that analyzes the micro and macro economy of a nation, considering supply and demand, financing conditions, economic variables, etc., important at the time of a company’s life.

The objective of the financial administration is that the person or in charge of this department must ensure the maximization of ordinary shares of the company, but not only this, but to analyze the general compositions of its assets and liabilities, income and expenses for the increase inutility, future investment analysis to the lowest possible risk with high profitability etc., in such a way to make accurate decisions for your auditorium or shareholders.

This department must analyze the commercial risk in singing to how the company and its different processes operate, and the financial risk that the company is so indebted and said money for what will be destined. Within an organization it is important that these two risks are balanced by business health.

According to (Edgar, 2009) states that the financial administration must cover the following points and following objectives:

1. Responsibility, decision and management of investment.
2. Responsibility, decision and management of financing.
3. Optimize the degree of profitability of a company.
4. Get a liquidity level for operational development.
5. Optimally rewarding the shareholder.
6. Increase the value of the company

Conclusions

The financial administration is very important within organizations, since they analyze the components that the company has, manage money optimally, examine financial market environments, maximize the value of the company and shareholders. The objective is to represent the participating spokesmen, that is, actions in order to make decisions focused at greater benefits with the lowest cost.

Bibliography

• Edgar, g. (2009). Financial administration . Bogota: Good seed.