What Is the Scope of Financial Management?
The scope of financial management involves processes and procedures affiliated with managing a company’s cash flow, inventory, fixed assets and debtors, according to Accounting Education. Financial management requires company representatives to collect payment from clients in a timely manner, pay expenses accordingly and create financial plans to ensure cash flow.
The scope of financial management also includes compiling goals, objectives, and requirements to complete projects that produce revenue by estimating expenses and time required to finish a project to the client’s specifications, according to Investopedia. The scope of financial management with a client project may also include estimating the cost and time of gathering materials, performing the actual work and estimating the profit margin to determine if the project is a profitable fit for the company.
Financial managers often oversee projects to ensure deadlines are met, costs are kept at a minimum and client relations are on good terms, according to Investopedia. The scope of financial management also includes evaluating the progress of each project after its completion to determine if the client’s business was a venture that resulted in revenue, exposure for the company and potential profits in the future with repeat business. Without evaluating the scope of financial management, companies are at risk of losing profits or taking on projects that may not benefit the company’s reputation, client base and financial bottom line.