Finance Is More Than Money By: je Dunn

The definition of finance is the provision of funds or loan supplied to an individual or company. The term can also refer to another branch of the subject dealing with its management.

If you prefer, it can also be a general term which encompasses the entire subject of managing and supplying money in the business and private sector. This of course requires the use of specialist trained in money matters often referred to as finance managers.

This involves lending money to another company or individual, either from internal resources or externally. The function of the finance manager is to Optimize or enable the fund to be made available with as little cost to the company but provide for a profit to be made in this process.

The fact is that it governs most of the worlds activities and poor finance management will immediately show up as conditions deteriorate in procurement, production and sales as it affects every sphere of business activities.

That is why, a fund managers job is stressful as they must be careful where they allocate their funds and the potential risk involved thereafter.

A well know marketing and management guru Lee Iacocca said that finance managers always looked at the cost involved in a finance deal and not the future return.

Unlike the sales managers who would like to invest in the future by product development, finance managers are rather skeptical of financing a project whose benefits lie in the future; even though their management governs future outcomes too.

Some problems arise for the number of businesses that arrange loans and then use them for personal reasons, forgetting that this clearly defined barrier exists. Most lenders will cancel the loan if they feel they have been deceived this way because they are unsure what the money is to be invested in.

Businesses are gradually getting the message that they must behave more responsibly if they are to stand a chance of expanding in years to come.

The problem is that many small businesses do not always source the best finance deal like trying their bank or alternatives like family or relations. However, finance managers are in the position of making money for their company so out sourcing their lending can help increase their profits.

Banks have always been known as institutions that prefer to lend money to those that least need it which is why if you are already wealthy and require a loan it is often arranged at a preferential rate of interest.



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