Roles and Objectives of Financial

¶ … Roles and Objectives of Financial Management

Defining the Roles and Objectives of Financial Management

Matrix of Roles and Objectives of Financial Management

To ensure regular and adequate supply of funds

To ensure returns to stakeholders of the business

To ensure optimal funds utilization

To ensure safety of investments made by the firm

To create and sustain a sound capital structure

Accounting

Implements controls and procedures to ensure funds are tracked according to GAAP and FASB stds; Manages a/P and a/R functions; ensure auditability of transactions

Accuracy of financial statements to measure the return on investment of each initiative

Manages all accounts to ensure they are accurate, reflecting GAAP and FASB stds in the reporting of funds use

Using GAAP and FASB reporting, ensuring that investments are protected through secured reporting techniques.

Enforces FASB and GAAP rules to ensure the stability of the capital structure

CFO

Strategic decisions with regard to financial management of the firm

Judgment as to which specific investments will pay the highest return

Defines the governance frameworks for funds utilization

Defines the security and safety strategy of accounting systems

Defines the capital structure goals and objectives; creates a governance plan

Controller

Management of financial metrics and daily functions of the finance dept.

Manages the periodic payments and inbound income from investments

Manages daily tasks to ensure they align with strategic goals

Implements and manages daily security tasks to ensure data & finance security

Executes the governance plan and defines overall strategy at tactical level

Information Systems

Supports all aspects of ensuring a regular supply of funds are available

Tracks the ROI of each specific investment and reports it to mgmt.

Auditing and evaluating overall funds use

Implements enterprise-wide it systems to protect data

Creates and sustains metrics and KPIs to measure capital structure performance

Tax Planning

Endures tax payments are made on time; local, state and federal tax laws are adhered to; advanced tax payments are also made while also ensuing the liquidity of the company

Determines the implications of each investment on the tax condition of the firm

Defines tax strategies for ensuring a high ROI and low tax burden based on funds use

Defines the trade-offs necessary to ensure a high level of tax compliance and cost savings

Manages the tax implications of the capital structure

The five roles as defined throughout our text and in current research include accounting, the office of the Chief Financial Officer (CFO), Controller, Information Systems and Tax Planning (De Loo, Verstegen, Swagerman, 2011). Each of these roles has an integral contribution to the overall performance of any enterprise. The reliance on a cross-functional team approach to managing risk while seeking to optimize returns on investments is what unifies these diverse teams together (Allen, 1992). The role structure of financial management depends on the transformational leadership skill of the CFO, Controller and senior management staff of the accounting and finance function (Rosen, Granbois, 1983). This team's combined validation and support for a given strategy is critical for tits success, without it nothing will happen and employees will not see the need to also change (Rosen, Granbois, 1983).