Finance in the past was an area that we used to choose to study if we want to have a career here. However, training in Finance is increasingly something that a wide range of management is required to take. So why study finance for non-Finance Managers? What can you learn and how can you use it?
What is financial management?
When you study finance, you are learning about financial management. This is defined as ‘strategic planning, organising, directing and controlling of financial undertakings’ which can be in a business or any size.
Some of the core objectives of financial management including ensuring that a business or organisation has the supply of funds needed to continue to trade. There may also be a degree of ensuring that shareholders get a good return on their investment if there are shareholders. But it will involve looking at the effective utilisation of funds within the business and even looking for the best opportunities to invest profits made.
What do you learn?
While the exact details of what you learn depends on the finance course you take, there are some general elements that will be covered. These mostly come under the heading of financial planning – calculating the capital required by a company and where it should be allocated.
You will learn how to make a financial plan, which is something every business should have. This involves several key elements:
● The capital required
● The organisation and structure of the company
● Financial policies and any relevant regulations
● Financial control – who handles what
If you are running a small business, then these responsibilities will likely fall to you as you won’t be in a position to hire a finance manager. In effect, you need to train to be a finance manager for your business so that you can handle the core responsibilities of this job.
What does a finance manager do?
If you are training in finance to be a finance manager but don’t intend to actually apply for this kind of role specifically, you can use all of the knowledge in your business or the company you work for. Often small or medium-sized companies may have a member of staff who already handles something like bookkeeping take financial management courses to allow them to expand their role.
Another reason that non-finance managers take finance training is when they are starting their own business. That’s because the role of the finance manager is a key one when starting a company to ensure things are done on a solid foundation.
For example, you will need to know how to:
● Decide on what capital is needed to start the company but also establish the
company’s policies regarding expenses and profits to govern these. The capital
needs to be sufficient to increase the earning potential of the business
● Choose the right capital structure for the business based on short term and long term debt-equity analysis
● Invest the capital in order to gain more funds as the business grows
● Look at the allocation of profits including contingency funds, expansion funds and also the dividend for any shareholders
Once the company is running, the financial manager will need to be the one who helps to manage the money. That’s why many business owners take this kind of training – learn about managing salaries, bills, meeting liabilities and purchasing equipment or stock. The ongoing running of the business’ financial side also include looking at the short and long term financial position to ensure the company remains healthy.
Why would you study as a finance manager?
There are lots of scenarios where someone would train as a financial manager when they don’t intend to make a career in the profession. That’s because the skills and abilities learning within such training can easily be applied to a wide range of other roles.
You may need these skills to run your own business. Managing finances is key to success and growth and having a more advanced understanding of financial best practices and regulations can make a huge difference.
You may also take the courses if you want to offer a comprehensive financial background for a small or medium company to handle all of their financial issues ranging from financial planning to bookkeeping.
Another reason for taking these courses may help you get a promotion or a rise. If your current role has plateaued and you can’t advance, you may need additional training to be able to go into another role. If that role involves financial management, by taking this training you can increase your chances of the promotion.
Understanding finance is the kind of training that can be applied to many different
businesses in lots of different ways. That’s why it is a popular training option, even for those not planning to go specifically into that role.