Sunday, 12 July 2015

IMPORTANCE OF FINANCE IN BUSINESS

   What we know about finance in our basic language is money, not that money used by us while shopping, but   the management of large amounts of money, especially by governments or large companies. "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process of acquiring needed funds. Because individuals, businesses and government entities all need funding to operate and they also need to arrange these funds in the effective manner so that the cost of fund is also less.


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If we all notice in our daily life , the whole idea runs around money. If you need something then you need money and we study to earn money. Like oxygen , food, water ,money is the also the basic need for survival . Today, you can only fulfill your desires if you have money in your pocket. Similarly, a business too needs  money  for its establishment (finance).as discussed above the amount of money required by big business and government is not small. they need funds for,  expanding their business, for new projects, for running of the business,  at start up stage and also at their bad times.in 
short we can say that we need money which to turn dreams into .

but now the  question arises,that     from where would you get finance for your business ?


    By taking loans, borrowing, issuing debentures and shares (if you plan to set up a company),bank loans etc. we also know that these funds are not raised for free , they to involve an additional cost , called interest. You need to see that funds raised doesn’t remain unused because they will create a unnecessary cost, which is a not good. therefore, there is a need for
financial management.
    
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 Financial Management refers to the efficient and effective management of money (funds) in such a manner as to accomplish the objectives of the organization. It is the specialized function directly associated with the top management.
Financial Management is one of the functional areas of business. Therefore, its objectives must be consistent with the overall objectives of business.
Money needs to managed wisely, you need to plan out how that which  source of raising money has less cost. Moreover, you should have money for bad times too , because at that time no one  lends money and you need to help yourself"

  
      Hence at the end I would like to conclude by saying that finance is the basic  need for the business ,when you have your good times you earn money  and when you have  bad times then you need money! So balance the situation and don’t let the bad times occur!



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                              It's all about Money......  Honey......


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