The Role of Financial Management

The Role of Financial Management

Introduction

It is natural in every organization to protect all their finances and other resources. Part of the internal work of the organizational leaders is to formulate the appropriate strategy or technique that is fit for their managerial skills and knowledge. Due to different constraints came from the economic and financial crises, certain protocol or standard is needed to ensure that all their efforts will not be wasted. The call for a management of the financial resources is indeed became part of the organization’s traditional setting for the internal management.

Financial Management

The financial industry’s business and regulatory environment is dramatically changing, leading to the creation of new challenges and risks (NERA, 2009). This is an observation based on business analysts which pertains to the connection of changes and the formulation of the challenges and risks. Because of the growing interest of various industries on globalization, the revolution for changes appears. Alongside is the growth of the challenges that should be addressed by the organization. The involvement of the financial industry considers the idea regarding its management. Organizations should determine the capacity of their financial status to support the ongoing operation.

Various organizations are attempting to enhance their financial stability through the variation of the measurement and managing the risks. The business leaders seeks the best practices wherein they can implement in the entire system is the major problem that they can encounter. Seconded to this fact is the challenge to carry all the changes that may appear within or outside the organization. For sure, those challenges can create an impact in the performance of the organization as well as their financial strengths. There is only one thing that the business leaders should understand, every industry is different to the other and the application of the strategies depends on the nature of their industry. However, the organizations tapped the idea of market risk, credit risk, liquidity risk, and operational risk assessments. The exposure of an organization in the changes drives to the processes in effective risk management. As an ongoing procedure, the organizations are advised by the shareholders or the business analyst to take precautions before spending on a venture wherein there is no clear future. In this case, the review on the financial status and current reports