What is the Role of Financial Management in Business?

21 October 2021|Related :

Effective financial management is the key to a successful business. Without it, you could find your business making poor decisions, over or under-capacity and missed opportunities for growth and profitability. 

What is Financial Management?

Financial Management refers to the strategic and dedicated planning, organising and handling of all financial aspects in the business. This includes:

  • Accounting and bookkeeping
  • Reporting
  • Managing cash flow
  • Financial planning
  • Ensuring the organisation is fully tax compliant

Let’s take a look at these in a bit more detail…

Accounting and Bookkeeping

One of the most important parts of running a business is making sure to measure and record all financial information. Not only is this essential for keeping track of your cash flow, it is also necessary to ensure you are fully compliant when submitting your tax returns. 

Nowadays, most financial directors use cloud-based accounting software such as Quickbooks Online, Xero and Sage for bookkeeping and accounting so they can manage their books from just about anywhere from any device.


Another role of the financial director is creating clear and useful financial reports. Financial reports are a standardised measure of a business’ financial performance and can give an insight into the sources of a company’s revenue, how it spends its money, its assets and liabilities and how it manages cash flow. Many investors will be keen to see these reports so they can see how their money is being used.

Managing Cash Flow

A financial director should also be managing cash flow effectively. Keeping track of what you owe to your suppliers and what your customers owe you is essential so you can stay liquid with the correct amount of cash at all times.

Financial Planning

Effective financial planning can make or break a company. A business needs to be able to make informed decisions and identify opportunities for growth in order to succeed as a business. This could mean working out your short, medium and long term goals and better prioritising them or finding great opportunities for investment for example.

Ensuring Your Company is Fully Tax Compliant

Making sure you’re fully compliant with HMRC’s tax regulations can hold a heavy burden, especially with the increase in reporting obligations, robust investigation policies from the tax authorities and harsher penalties for non-compliance. This is why effective financial management is crucial and when corporate tax planning is done right, you should be able to see significant improvements in your bottom line too. 

How a Surrogate Financial Director Can Help

The main problem many businesses find is that, even with a good product, service and price, they are hitting a roadblock when it comes to selling into the larger companies. We often find that this happens due to the perception of the business and having the right people onboard acting as the faces of your business can make all the difference in turning your company into the kind that larger and blue-chip organisations want to work with.

If you find your company’s financial performance isn’t ideal, or if your business isn’t growing how you had expected, a surrogate financial director could be just the solution to help you level up.

What is a Surrogate Financial Director?

A surrogate financial director is a professionally qualified accountant who can act as your Non-Executive Financial Director to bolster your Board of Directors. They can attend board meetings to help you make better informed decisions, control all aspects of financial management, and attend meetings with customers and suppliers to give them the reassurance that you mean business.

Better Financial Management with Ryans

Ryans Financial Management Ltd has qualified independent financial advisers to help you and our clients have been benefiting from our surrogacy service since 2007. In fact, our very first surrogacy client was insolvent with negative reserves of almost half a million pounds, however,  this was quickly turned around after they brought us in. The company not only recovered from insolvency, but grew its net assets to £278,000 in four years and racked up an impressive client list including Argos, Currys, Dixons, PCWorld, Littlewoods and Makro and more.

We’ve plenty more success stories like this. So, if it sounds like something that your business could benefit from, let’s chat.

Made by Statuo