While accounting is the reflection of past business activity, financial management is a future-oriented activity that helps managers make well-thought-out financial decisions. Financial management is significantly wider in scope, requiring a broad perspective and the combination of various financial knowledge. Financial management includes more traditional areas such as accounting and taxation, forecasting and budgeting, investment management and profitability analysis, financing and cash flow management, reporting, as well as management of the company’s technological development, restructuring of business connections, and protection of shareholder interests.
Inputs for financial management in addition to accounting include the company’s overall goals and development strategy, shareholder expectations, macroeconomic forecasts, various economic indicators, and other relevant data related to the company’s business.
The outsourcing of financial management service is still a relatively uncommon but steadily growing trend. Instead of hiring a financial manager, it is more cost effective to outsource this service and determine the scope and period of the service based on the company’s needs.
The financial management service is intended for companies that may already have in-house accounting, but management needs help in the following areas:
- checking data and financial analysis
- reviewing the principles of tax accounting
- forecasting and budgeting
- managing working capital
- profitability analysis of financing and investment projects
- developing customized reporting that meets the regular board’s needs
- financial consultation in the restructuring of business connections.