FINANCIAL MANAGEMENT SYSTEM

Financial Management means planning, organizing, directing and

controlling the financial activities such as procurement and utilization
of funds of the enterprise. It means applying general management
principles to financial resources of the enterprise. The functions of a
financial management system are:
1) Estimation of capital requirements: A chartered accountant has
to make estimation with regards to capital requirements of the
company. This will depend upon expected costs and profits and future
programs and policies of a concern. Estimations have to be made in an
adequate manner which increases earning capacity of enterprise.
2) Choice of sources of funds: For additional funds to be procured, a
company has many choices likea. Issue of shares and debentures
b. Loans to be taken from banks and financial institutions
c. Public deposits to be drawn like in form of bonds.
Choice of factor will depend on relative merits and demerits of each
source and period of financing.
3) Investment of funds: The finance manager has to decide to
allocate funds into profitable ventures so that there is safety on
investment and regular returns is possible.
4) Disposal of surplus: The net profit decision has to be made by the
finance manager.
5) Management of cash: Finance manager has to make decisions
with regards to cash management. Cash is required for many purposes
like payment of wages and salaries, payment of electricity and water
bills, payment to creditors, meeting current liabilities, maintenance of
enough stock, purchase of raw materials, etc.
6) Financial controls: The finance manager has not only to plan,
procure and utilize the funds but he also has to exercise control over
finances. This can be done through many techniques like ratio analysis,
financial forecasting, cost and profit control, etc.
The main modules are:
1. Admin
2. Charted account
3. Financial manager
Admin:
The admin has the power to manage the overall work. Only the
admin can add employees and can view the profile as well as edit
the profile of all the employees. They can communicate each other
through mail. The admin will assign the work of these employees
and validate their performance on every month. The admin will
validate the financial status of the enterprise and provide new

ideas to the employee. The major responsibility is to regularly

coordinate the work of employee.
Chartered account:
This is a registered employee by the admin. The major
responsibility of this module is to manage the transaction flow of
the enterprise. The functionality may involve in financial

reporting, taxation, auditing etc. The charted accountant has

the responsibility of estimating the capital, total expenses,
total income, and profit. And also he/she has to generate the
annual report showing the profit or loss and to provide
financial advice. This financial advice has to be viewed by the
finance manager and the admin.
Finance manager:
The function of the finance manager is to identify and
determine the finance resources and the best possible way to
utilize the finances for the organizational objectives with the
maximum rate of return of the finance resources utilized in
the most effective and efficient way. In this, the finance
manager can return the finance resource by issuing share, he
can apply for the loan. he can view the current status of the
loan which has taken before, and also the status of share. He
can view the monthly date for the repayment, rate of
interest, total amount to pay per month etc. he can keep a
record about the monthly expenses like salary, payment of
electricity and water bills, payment to creditors, meeting current
liabilities, maintenance of enough stock, purchase of raw materials,
etc. the finance manager has to send the report of expense and
income of the enterprise to the chartered accountant.