6 Future Scope of Financial Management Nature The Guide

What is Scope of Financial Management
  • Save

Last Updated on December 15, 2022 by Jayprakash Prajapati

Financial management is one of the important parts of overall management, which is directly related to various functional departments like personnel, marketing, and production. Financial management covers a wide area with multidimensional approaches. The following are the important scope of financial management.

What is the scope of Financial Management?

1. Financial Management and Human Resource
2. Financial Management and Marketing
3. Financial Management and Production Management
4. Financial Management or Mathematics
5. Financial Management and Accounting
6. Financial Management and Economics

1. Financial Management and Human Resources.

Financial management is also related to the human resource department, which provides power to all the functional areas of the management.

The financial managers should carefully evaluate the requirement of manpower for each department and allocate the finance to the human resource department as wages, salary, remuneration, commission, bonus, pension, and other monetary benefits to the human resource department. Hence, financial management is directly related to human resource management.

2. Financial Management and Marketing.

Produced goods are sold in the market with innovative and modern approaches. For this, the marketing department needs finance to meet its requirements.

Introduction to Financial Management 5 The financial manager or finance department is responsible for allocating adequate finance to the marketing department. Therefore, marketing and financial management are interrelated and interdependent.

3. Financial Management and Production Management.

Production management is the operational part of the business’s concern, helping much of the money to profit. The benefit of concern depends on production performance. Production performance requires finance. Because the production department needs raw materials, machinery, wages, operating expenses, etc.

These expenditures are decided by the financial department, and estimates are made. And finance managers allocate appropriate finance to the production department. The financial manager must be aware of the operational process and finances required for each process of production activities.

4. Financial Management or Mathematics.

Modern approaches to financial management applied a large number of mathematical and statistical tools and techniques.

They are also called econometrics. Economic order quantity, discount factor, time value of money, the present value of money, cost of capital, capital structure theories, dividend theories, ratio analysis, and working capital analysis are used as mathematical and statistical tools and techniques in the field of financial management.

5. Financial Management and Accounting.

Accounting records include the financial information of the business concern. Hence, we can easily understand the relationship between financial management and accounting. In the olden periods, both financial management and accounting are treated as the same discipline.

Then it has been merged as Management Accounting because this part is very much helpful to finance managers in taking decisions. But nowadays financial management and accounting disciplines are separate and interrelated.

6. Financial Management and Economics.

Economic concepts like micro and macroeconomics are directly applied to financial management approaches. Investment decisions, micro, and macro-environmental factors are closely associated with the functions of a financial manager.

Financial management also uses economic equations like money value discount factor, economic order quantity, etc. Financial economics is one of the emerging areas, which provides immense opportunities to finance, and economical areas.


1 thought on “6 Future Scope of Financial Management Nature The Guide”

  1. Nice post.
    Any entrepreneur who wants to start a business in India. Lawwonders is the right choice for them. Lawwonders is a full-fledged leading legal and business consultancy service provider in Malappuram, Kollam, Thiruvananthapuram, and all over south India for company registration, firm registration, partnership registration trust registration, Society registration, GST Registration, Income tax registration, Annual return submission, ROC filing, Company audit assistance, IPR and a passionate team of lawyers appearing before any Indian courts for getting any kind of civil or criminal legal remedies.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top
Copy link
Powered by Social Snap