Importance of financial management in business

Every unit in business needs funds to perform tasks. From the lowest level to the highest level, every single activity requires adequate funds for the proper conduct of business operations. However, the need for finance can differ from department to department according to the organization.

In short, finance is addressed as the lifeblood for any business concern. For any business, to achieve organizational objectives effectively and efficiently, it is very important to manage the funds in the most optimum way possible. Although there are various components you can ignore for a time, but finance is the element that cannot be ignored. In other words, for the smooth running of a business concern, adequacy of finance is must with the time-to-time check on the financial needs of every department. Therefore, the acquisition, allocation and optimum utilization of finance for the attainment of set organizational objectives is known as financial management. Some of the major importance of financial management is as follows:

Helpful in determining financial needs

Financial management helps the management to determine the financial requirements of the business. Also, for the smooth running of a business, adequate liquidity has to be maintained. Liquidity means the availability of liquid assets to instantly pay the day-to-day expenses. financial management helps in managing and estimating all such financial requirements.

Acquisition of required finance

After determining the fund requirement in the first step, the next step is to decide the sources from where these funds are to be acquired. There are basically two types of sources for fund acquisition:

• Borrowed fund

Funds that are borrowed from other sources like debentures, public deposits, financial institutions, etc.

• Owned fund

Funds raised via uncalled equity share capital and the free reserves indicated in the balance sheet.

Optimum utilization of funds

Once you acquire the funds, it is very important that you utilize it in an efficient way. We know that finance is considered as the blood for any business concern. Two organizations can have the same resources and still, one company gets to lead on the race. This is because of the optimum utilization of the resources i.e, efficient management of finance.

Helps to improve profitability ratios

When the financial needs of a business are met properly, it ultimately improves the profitability of the business. After all, the ultimate goal of every business is to make profit. If the funds are used properly, it will obviously enhance the productivity of the business.

How TallyDekho mobile application is useful for your business?

Tally Dekho is an ideal mobile application for all the business people and Chartered Accountants. It doesn’t matter if you’re at your workplace or not, you can keep eye on every single purchase or sale made. You can also keep track of all the important data as well on your phone. Thus, managing financial aspects has now become very convenient. Secondly, the application is compatible with android as well as iOS mobile devices.

With TallyDekho app, you can check:

• Sales
• Bank Balance
• Cash in hand
• Purchases
• Expenses
• Outstanding Payable
• Outstanding Receivable
• The ledger of various parties
• Regular reports through graphs
• Outstanding dues & get regular payment reminders

Also, the app is free exclusively for Chartered Accountants for now. Now it has become very easy to keep a regular watch on stock, sales, purchases, outstandings, cash balance and much more. And you can keep track of all these details even when you’re not in your office premises. In this way, managing your financial needs has now become very easy and quick with TallyDekho mobile application. Integrate with your Tally ERP9 today and let your business revive and go up. Stay connected for more interesting articles. Feel free to share your feedback.