As the proverbial saying goes, it takes money to make money.

Finance is the lifeblood of the business; without it, things wouldn’t run smoothly. It is the source to run any organisation, it provides the money, it acquires the money.

The prudent management of the organisation’s finances is essential to the long-term growth and sustainability of the business. Most entrepreneurs are not experts in managing their finances, but they need to learn enough of the finance function to have the working knowledge required to run the business.

Financial Management is the business process that helps the organisation meet its goals by acquiring funds, managing the funds, and planning the judicious expenditure of the funds. Besides compiling the financial statements of the company, the primary responsibilities of the finance function are to budget for capital requirements, select the appropriate capital structure, and manage cash flow.

Financial management affects your ability to employ and pay your staff, purchase raw materials, survive during the tough times, and flourish when the circumstances are right. It may not be as important as a great purpose and vision or an innovative product. Still, proper financial management makes the good stuff happen.