Principles of Financial Management

Principles of Financial Management & Tips for Managing Financial Management

There are also several principles of financial management that must be applied in every company.

Accountability

Accountability is a moral and legal obligation contained in a company. So that it can be seen where the funds are obtained from, what are the funds used for, and how the company uses the funds. All parties and aspects of the company must know how the funds and authority are used.

Consistency
The company’s financial system must be carried out consistently, it does not mean that the company cannot replace the existing system. But with this change, it indicates an unstable use of funds

Life sustainability
Financial managers must be able to plan finances so that the company can continue to run and live. Financial managers must also have the right financial strategy.

Transparency
Companies must be transparent and open to company finances. The company must provide information about its activities with interested persons. Accurate, complete and tidy finances can be easily accessed by every interested manager.

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Accounting Standard
The accounting system that applies in every company must be the same. Which means all accountants around the world can understand and understand about the same accounting system.

Integrity
Financial reports and records must be maintained with good integrity. Financial reports must be as complete and accurate as possible.

Management
Companies must be able to manage company finances properly. The company must be able to guarantee that the funds that have been budgeted can be used in accordance with the objectives and financial plans that have been made previously.

Tips for Managing Financial Management

Once you know about the functions, objectives and principles of a financial manager. We also have to know how powerful financial management tips are. Here are some tips for effective financial management.

Separate Between Personal Accounts and Company Finances
Many business people still mix personal money and company money. Personal and company money must be separated, it is useful to measure the company’s financial condition and avoid misuse of company finances.

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Allocate Expenditures to Pay Yourself
Even though the company is your own, every month you have to allocate and pay yourself which definitely suits your needs. If you borrow money from your own company, it must also be recorded as debt and must be returned.

Create Financial Report
Financial reports are made with the aim of knowing the entry and exit of money and can find out the profit and loss of an ongoing business.

Keep a Record of Cash Flow Projections
With a cash flow projection record, companies can know when to spend and when to receive funds. This record also serves to look for efforts before a loss occurs in the company’s finances.

Avoid Employee Stay Money
Don’t let company money be taken by employees who manage company finances. Most likely the money will be used for the personal needs of the employee.

Do a Stock Check
Checking the stock of goods on a regular basis will minimize manipulation. It often happens that the stock of goods that have been sold are written as unsold. Thus, the funds that should still exist must disappear without a clear purpose.

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Separate Cashier and Accounting
The section that holds cashier’s money must also make its own financial statements. Cashier’s money must be reported daily, this is to avoid potential data manipulation.

To make this easier, you can use POS and accounting software to minimize fraud and make it easier for you to monitor your business.

For maximum results, you can use accounting software that has integration features with various cashier software, for example, such as Accurate Online.

Accurate Online is a cloud-based accounting software that has been used by more than 300 thousand users of various types in Indonesia. Accurate Online also has the best features by integrating with other software, for example, cashier software such as Moka Pos.

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