Financial Manager Duties

The three main duties of a financial manager in a retail setting arefinancial planning, monitoring, and controlling performances. Financial planning is the most important because it directly refers to the financial status of the retail business. According to Horst Albach (1962) by financial planning we get “an understanding of future eventsand a capacity to make reasonable adaptation to those events in the light of the goals of the firm” (Albach, 1962, p. 78) It is within this concept the financial manager also makes out the budget. This is regarded as the most vital part of a financial manager’s financial planning. It is through the budget he is able to give a projection into the short as well as long term financial aspect of the business.

Simply laying out the financial plan for the retail operations does not end his responsibility; his second crucial duty involves following up of the financial planning. He will periodically monitor the performance of the financial planning. Considering what will be the most appropriate method of scrutinizing, the financial plan will decide what systematic tools to use; and in what time schedule the monitoring should be carried out. For instance, he could consider performing a weekly monitoring, a monthly or a quarterly evaluation of the financial performances. Lastly, the financial manager will use controlling measures. This will be put into place only and only when he detects the financial planning or the budget put in place are not performing as desired to reach the retail’s setting objectives. Therefore, he will devise and use appropriate control measures to ensure the retail business achieves its financial objectives.

In short, while the duties of a financial manager, particularly in a retail setting are diverse and challenging; the task of financial planning, monitoring, and controlling are certainly the most vital because they directly will have a bearing on the retail’s success.

Essay 2 / Question 2 - Explain the difference between a financial plan and a budget. Evaluate how a budget can contribute to a business achieving its

While both are strategic jobs for a financial manager; they do have noticeable differences. For instance, financial planning is a dynamic process, different from traditional budgeting and planning, which by nature are static analyses which ignore the potential and probability of change elements. (Nolan &Foran, 1983; p.436) As understood, the concept ‘budgeting’ is more static; yet equally relevant for the business’s to financially remain strong. One major advantage of ‘budgeting’; it provides methods to plan out realistic goals. For instance, by identifying the costs and timing of capital improvements necessary to achieve targeted future service levels, a financial manager can help the retail management to get a better understanding of the results of the anticipated goals. (Nolan &Foran, 1983; p.437) Furthermore Christopher Bart () argues that budgets are essential to the management for effectively control of an organization. Budgets thus are the most important tools management has for leading a company towards its goals; in short budgets are required tools to “institutionalize” a company goals, monitor performances, and progress of both the business, and individual products; and vital to help measure the performance of managers” (p.285) An analysis of these resourceful clearly confirm the scope of budgeting as a potential financial tool for companies; they