Financial management consists of all those activities concerned with obtaining money and using it effectively. The financial manager must also ensure that projected uses are in keeping with the organization's goals. Effective financial management thus involves careful planning. It begins with determination of the firm's financing needs. The Need for Financing.
Money is needed both to start a business and to keep it going.
Sales revenue does not generally flow evenly. Both income and expenses may vary from month to month or from year to year. Short-Term Financing Needs. Short-term financing is money that will be used for one year or less and then repaid. Two deserve special attention.