Understanding financial-management problems requires analytical dexterity and strategic vision. All organizations, regardless of size, put procedures into place that enable personnel to increase revenues while slashing costs. Even nonprofit institutions -- such as government agencies and charities -- cope with the challenges that come with running efficient operations.
Perhaps one of the most pressing issues for corporate leadership is the firm's ability to raise cash. Not just funds for one business unit, but cash for the entire organization with a long-term vision. In this perspective, companies work in tandem with investment bankers to evaluate lender risk appetite.
After borrowing money, a company must find adequate avenues to put it to good use. Deploying cash on hand is often a tale of business acumen, knowledge that requires top leadership to invest in the next blockbuster product while dodging competitors' strategic bullets.
Funding Long-Term Initiatives
Raising cash for corporate activities goes hand-in-hand with financing long-term initiatives. Investors often are cautious about tying up cash for the long haul, especially if the economy is posting sluggish performance and default risk is on the rise.
Recording Transactions Accurately
Managing corporate finances requires accurate record-keeping. Without correct financial data, management may be unable to lay the groundwork for long-term profit monitoring. Recording transactions accurately requires that a company train bookkeepers on the basic accounting notions of "debit" and "credit."
Publishing Accurate Financial Statements
Accurate journal entries translate into financial statements that are correct, complete and in line with accounting standards. Corporate executives often find themselves wondering how to make sure accounting data summaries abide by generally accepted accounting principles, or GAAP.
Analyzing Financial Data
Taking a peek at performance data without delving into the details is often unacceptable to corporate leadership. In fact, one of the problems in financial management may be how to summarize vast reams of information and make good use of it.
Hiring and Retaining Top Performers
In an economy with growing competitive rivalry, the quality of a company's personnel often makes the difference, thrusting the firm to market while rivals are scraping by with mediocre results. Economists dub "knowledge capital" employees' combined expertise in product management, innovation and strategic acumen. To cope with personnel considerations, human resources managers work in tandem with business-unit chiefs to find the best tactics to attract competent and experienced employees.
Increasing revenues indicates department heads' dexterity in steering a company to profitability. Revenue management often calls for effective marketing strategy and brand communication.
Finding new avenues to spur sales may be a daunting task. To mitigate potential shortcomings in revenue management, companies often cut expenses. Businesses see an uptick in net income by slashing costs and increasing sales.