Amo, Nina Kryscha Grace Y.

Financial Management: Chapter 1

Synthesis Paper

Money matters. In a manner of perspective, goals pictured out, plans set place it is
different for individuals but it’s not the same for businesses. Realistically, it is basically where
a business came into form. Thus, as you eventually grow you gain more responsibilities,
same as a business starts to grow, you face new challenges on how to continue it. And what
can both consistently do to achieve these challenges? One fundamental practice is to
manage. Most of our decisions especially businesses, revolve around finances since it is
interconnected to what we need and what we want. Managing reduces risk in handling
every financial decision a business or an individual could make.

To further dissect the topic of managing finances is to start on the definition of

“management”. According to Van Fleet and Peterson, it is a “set of activities directed at the
efficient and effective utilization of resources in the pursuit of one or more goals.” This can
tell the overall objective of management in general form. On the other hand, when we look
in a more complex way that fits with the business perspective, management thinkers
Megginson, Mosley, and Pietri have a different definition. To achieve organizational
objectives is to work with human, financial and physical resources by performing the
planning, organizing, leading and controlling function. Both definitions similarly led to
achieve an objective or a goal.

When we focus on the business definition, we see the word “organization” that
serves as a backbone to fully function a company. A company has this organizational
structure of people designated on a certain function whether it is from the management,
sales or accounting department. In my personal experience, I also organize on how I set up
to track my cashflows and make a separate spreadsheet from my small business. From
there, I will know what I should control in spending and what I should keep to save for
future uses.

Managing finances is a crucial factor for both businesses and individuals since it can
help us learn on what improvements we can still do. And by recognizing financial lapses, it
would help us to be ready from whatever crisis we may face or even think of ways to
prevent it. In agreement with the article published by Mahzeb Monica, financial
management highlights areas for growth. Knowing how to understand the financial data
presented to you will generate great investment decisions and see the areas on which your
business is doing well and which area needs keen observation.

Another section in Mahzeb Monica’s article stated that by practicing financial

management, we can improve our understanding about the market. It is important to know
the market trends and what approaches we can apply to it. Another is we would know how
to cut off costs. Being aware about appropriate strategies and methods to know where can
gain more but maintain the standard quality that we wanted to achieve.

Immediate decision-making is what we mostly do every day and this is just one aspect
that we opt to be taken aware of. Managing finances may be a phrase that we commonly
hear, yet we must not forget further to analyze on how it affects a significant percentage in
our lives.
REFERENCES:

Mahzeb, M. (n.d.). The Reason Why Financial Management is Vital for Business Success.

ClearHouse Accountants. https://chacc.co.uk/compliance-blog/reasons-why-financial-

management-is-vital-for-business/

Benefits & Importance of Financial Management for Businesses: Basics. (n.d.). Chango.
https://www.managementstudyhq.com/what-is-management.html