What is the goal of the corporation ie the goal of the financial manager?

By Indeed Editorial TeamApril 2, 2021Financial managers maintain a company's financial health. This might involve managing the budgets and creating profitability for a young compan

What is the goal of the corporation ie the goal of the financial manager?

By Indeed Editorial Team

April 2, 2021

Financial managers maintain a company's financial health. This might involve managing the budgets and creating profitability for a young company or strategic risk assessment and investment evaluation for an established company. The goals of financial management remain the same, however, no matter the size of the company. In this article, we discuss financial management goals as well as the tasks and components involved in achieving them.

What is financial management?

Financial management is a profession in corporate finance that involves directing the financial situation of a company by managing the budget, producing reports and strategizing for the future. A financial manager's everyday activities depend on the size of the organization and how much data they have to maintain and process.

Read more: Learn About Being a Financial Manager

Common goals of financial management

The goal of a financial manager is to keep the company or organization solvent and successful. There are several elements to this goal:

Maximize current value

The financial manager or managerial team works to maintain the highest value possible for the company's assets. In a publicly owned company, this means maintaining the highest possible value per stock in the company.

Maintain growth

The financial manager aims to increase the company's value over time. They help to achieve this by producing and implementing financial plans.

Maximize profit

Maximizing profit may involve locating opportunities to invest, acquire a competitor or develop new products. This can involve communications with other divisions such as marketing or research and development to create efficient strategies.

Minimize cost

As they monitor spending, a financial manager looks for opportunities to minimize the costs of doing business, such as overhead, manufacturing and distribution costs. They then communicate these potential changes to the respective management teams.

Avoid bankruptcy

Finally, the financial manager aims to keep the company solvent, meaning it has enough money to continue operations and avoid bankruptcy.

Related: Your Guide To Careers in Finance

Components of financial management

These are the three areas of financial management that help financial managers fulfill their goals:


The financial manager maintains or creates profitability by controlling the organization's money, keeping up with expenses and making any necessary adjustments to how the company is spending money. They track these changes and adjustments relative to projected outcomes so that the company moves toward achieving its goals and long-term profitability.


The financial manager aims to maintain the company's compliance with legal reporting requirements. They do this by creating regular, accurate financial reports and staying knowledgeable about all relevant regulations. This is important because businesses report their finances to the government for taxation and public record purposes, and reporting these things accurately helps the business maintain a positive image.


To keep the company profitable, the financial manager makes projections and models for the financial future of the company. Their strategy can include long-term money management and investment, plans for expansion or strategic choices in other parts of the company that have a financial impact.

Financial manager duties

The specific duties of a financial management position depend on the size of the company. In a smaller company, one person might be responsible for most or all of the financial management tasks. In a larger company, several positions or an entire department accomplish these tasks together. Financial management duties include:

Tracking money

To keep a company solvent, a financial manager has to track how much money it has at any given time. Financial managers complete these tasks to track a company's assets:

  • Reviewing statements: Reviewing banking activity, statements and reports allows the financial manager to spot discrepancies.
  • Managing credit: As a company extends or utilizes credit, the financial manager keeps track of these transactions.
  • Creating improvement in budget areas: When the financial manager sees where costs are exceeding expectations or simply where there could be a financial improvement, they communicate and implement these changes.
  • Assessing financial performance: Financial managers measure how the company is performing relative to budgets and projections.

Managing documents

Financial management involves the creation and maintenance of many documents, which includes:

  • Developing company's master budget: Also called the budget variance analysis, a company's master budget brings the company's expenses and profits together.
  • Writing reports: The financial manager also creates other reports as needed, tracking the company's performance in broad or detailed scopes.
  • Utilizing technology: Since automation assists with record-keeping, the financial manager knows how to use databases and software to track funds and interpret large amounts of information.

Establishing compliance

The financial manager must know and bring the company into compliance with all relevant financial regulations. Here are some tasks that might include:

  • Managing payroll: The financial team maintains the payroll, which may include some time-tracking responsibilities at smaller institutions. Depending on the company's size, the financial manager may also report the payroll information to the Equal Employment Opportunity Commission.
  • Filing taxes: The financial team manages the filing of taxes for the organization, including federal taxes, state taxes, sales taxes, employment taxes and excise taxes.
  • Maintaining compliance with public reporting regulations: The Sarbanes-Oxley Act governs the reporting of publicly-held firms' finances. It requires that the company file annual reports publicly, that an outside auditor review the company's internal financial controls and that management sign off on these statements and be accountable for their accuracy. In a publicly-traded company, the financial management team is responsible for these reports.
  • Maintaining industry-specific compliance: In addition to any general regulations and reports, a financial manager must also keep track of any regulations that are specific to the agency. Non-profit organizations that provide healthcare or contract with a government usually have specific regulations to follow.

Creating strategies

The financial management team works to strategize and project the financial future of the company. This process can involve:

  • Developing and interpreting financial models: The financial team builds specific models to show how the business can operate in the future. They can use these models to deliver progress updates within the company.
  • Creating specific plans: With models and reports in mind, the financial manager creates plans for dealing with deficits or any differences between projections and actual costs.
  • Analyzing risk: With financial experience and knowledge of the company's history, the financial manager analyzes the risk of potential activities and may participate in pricing and negotiation for new contracts.
  • Identifying opportunities: The financial manager keeps up to date with industry trends, trades and standards. With this knowledge, it's possible to identify investment opportunities, potential mergers and acquisitions that might help the company.

Maintaining relationships

The managerial component of being a financial manager extends to managing personnel. Here are some of a financial manager's interpersonal tasks:

  • Supervising other financial employees: At large companies with financial services departments, the financial management positions involve overseeing other financial and accounting professionals.
  • Maintaining professional relationships: Financial management requires the maintenance of good working relationships with others. This involves any executives in the company and other departments, particularly purchasing and production departments, but also extends to any other agencies or clients that the organization may work with.

Related: Finance Manager Skills: Definition and Examples

Positions in financial management

Here are some jobs involved in financial management:


Treasurers manage cash flow, reconcile statements, select the company's bank and create reports. In smaller organizations, the same person sometimes fills both treasurer and finance director positions.

Credit manager

A credit manager tracks credit extended from a business to its clients. This position maintains relationships with clients, tracks payments and maintains credit terms and agreements, often developing reports on this activity.

Cash manager

The cash manager is responsible for the loans, cash and investments for an organization. They also keep track of projected future balances and ensure the balances stay within acceptable ranges.


A controller develops a company's strategic plans for the future and may also work with data to create reports and develop budgets.

Related: 6 Types of Finance Jobs

Risk manager

A risk manager identifies and evaluates the potential risk for an organization. They review the organization's past responses to risk and assess potential contracts to prevent future risk.

Chief financial officer

A chief financial officer is an executive who supervises all financial and accounting activity in a business. They are usually the third highest executive in an organization and report to the board of directors and a chief executive officer.

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