Back to: Financial Management
Good day, class! I hope you’ve all had a great week and are starting to notice just how important financial decisions are in both personal life and business.
In our last class, we introduced the idea of financial management and its purpose. Today, we’ll dive into something very practical—the role of the financial manager.
The Role of the Financial Manager
Every organisation—whether a small business in Lagos, a government office in Abuja, or a multinational company—needs someone who oversees how money is handled. That person is the financial manager. Think of them like the brain behind the money. They don’t just handle the cash, they also make plans, give advice, and make decisions that affect the entire business.
So, what exactly does a financial manager do? The job goes far beyond counting money or preparing budgets. One of their biggest responsibilities is decision-making. They help the business answer big questions such as:
– How much money do we need?
– Where can we get it from?
– What should we do with it once we have it?
– Should we borrow money or use savings?
– Should we invest in a new project or wait?
These decisions can make or break a business, and that’s why the financial manager is a key player in any organisation.
Now, the financial manager doesn’t work alone. They usually work closely with other departments. For example, if the marketing team wants to run an advert campaign, the financial manager helps check whether it is financially wise. If the operations team wants to buy a new machine, the financial manager looks at the cost and expected returns. So, they play a supporting role while also leading financial planning.
Here are some main functions of a financial manager:
Financial Planning:
This means looking ahead and setting goals. A financial manager must plan how to raise and use money to meet the organisation’s future needs.
Investment Decisions:
They help the business choose what to invest in—whether it is equipment, land, or new technology. These decisions are meant to bring profits.
Financing Decisions:
The financial manager also decides how to raise money. Should they take a loan? Issue shares? Use profits from previous years?
Cash Management:
Businesses need cash to pay workers, buy materials, and pay bills. The financial manager ensures that there is always enough money to keep things running smoothly.
Risk Management:
Every investment or business activity involves risk. The financial manager tries to reduce these risks and prepare for unexpected events.
It’s also important to note that financial managers must be ethical. Since they deal with money, there’s a strong need for honesty, transparency, and discipline. Mismanagement can lead to losses or even bankruptcy.
To conclude today’s lecture, remember this: the financial manager is not just a “money person.” They are planners, advisers, and decision-makers. Their work affects almost every corner of the organisation, from how people are paid to what the company invests in. Without a capable financial manager, a business can easily lose its direction.
Before our next class, observe or ask questions about how businesses around you manage their money. Do they take loans? Do they save? What kind of risks do they face?