What is financial management?

Financial management is strategically planning how a business should earn and spend money. This includes decisions about raising capital, borrowing money and budgeting. Financial management also involves setting financial goals and analysing data.

Financial management starts with recording all the money your business earns and spends. Accountants then prepare reports that help owners understand the financial health of their business. These include profit and loss statements, balance sheets, cashflow statements and budgets.

 

Related terms:
What is a financial statement?
What is the objective of financial reporting?

Related Xero feature:
Know your numbers with the online accounting dashboard

Related Small Business Guide:
Why use financial management software?

Accounting Terms

Accounting terms and how-tos for beginners. Let us walk you through all the basics that you need know.

What is financial management?

Financial management is strategically planning how a business should earn and spend money. This includes decisions about raising capital, borrowing money and budgeting. Financial management also involves setting financial goals and analysing data.

Financial management starts with recording all the money your business earns and spends. Accountants then prepare reports that help owners understand the financial health of their business. These include profit and loss statements, balance sheets, cashflow statements and budgets.

 

Related terms:
What is a financial statement?
What is the objective of financial reporting?

Related Xero feature:
Know your numbers with the online accounting dashboard

Related Small Business Guide:
Why use financial management software?

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