Responsibility of Financial Management

1. Financial Planning: It is the responsibility of the Chief Financial Officer to forecast the needs and sources of finance. He must also ensure the adequate supply of cash at proper time for smooth running of the business. Therefore, financial planning is necessary. He must also see that no surplus money is there in the business which is kept idle.

2. Raising of necessary funds: Secondly the financial officer must see whether finance is required for long term or short term. He must also assess the alternative sources of supply of finance and its effect on various concerned parties – shareholders, creditors, employees and the society.

3. Controlling the use of funds: The financial officer must use the funds effectively so as to earn maximum profits i.e., he is responsible for the proper utilization of funds. To meet the current and future obligations, he must control inflow and outflow of cash. He should not leave any possibility for misappropriation of profit.

4. Disposition of profits: It is the responsibility of financial manager to advise the top executives, that how much profit must be retained in business and how much should be sent to reserves, how much should be distributed to shareholders as dividend and how much should be used to repay the debts.