Finals (Financial Management)

Financial Management

It is a management of finances of business or organization in order to achieve financial objectives. It means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It key objectives are to create wealth for business, generate cash and provide return of investment.

Since this topic is important especially when you plan to manage a laboratory, although it is not quite related to the work of a medtech, still, it is important to know how manage your financial status in the laboratory. We need a budgeting process that composes of financial planning, financial control and financial decision-making.

There are 3 process to separate budgets during budgeting process:

• Operating budget
• Capital budget
• Cash budget

Forecast of expenditures:

- Effective budgeting: careful identification of all categories and most prudent allocation of funds for each laboratory

Financial controls- the finance manager has not only to plan, procure and utilize the funds but he also has to exercise control over finances.

One of the most important finance functions is to intelligently allocate capital to long term assets. This activity is also known as capital budgeting. It is important to allocate capital in those long term assets so as to get maximum yield in future. Following are the two aspects of investment decision.

Financial management helps setting clear goal, it also direct the efforts of all functional areas of business towards achieving the goal and facilitates among the functional areas of the firm. The importance of financial management is not limited to the managers who make decisions in the firm. Proper financial management will help firms to supply better product to its customers at lower prices, pay higher salary to its employees and still provide greater return to investors.