Senior Managers Must Make A1 Business And Technic
Your responses to two classmates’ postings must be 50-75 words and should be thoughtful, substantial, and polite — not just a “well done” phrase or “I agree.” Consider points of agreement, disagreement, assumptions, and value judgments. You should provide new insight or constructive comments.
See attached rubric
Response 1 Jarel:
The Four Phases of the Financial Management Cycle are fundamental to effective financial management. What do you feel is a Manager’s role in supporting the Financial Management Cycle, and what are some of the specific touchpoints that happen over the course of a year that helps ensure a Manager is being an effective Financial Manager?
I am new to financial planning and had somewhat of an idea of how important it was, but after reading the text and digesting what I had learned. I can say now with certainty that it is incredibly important to the success of any business as well as play an important role in the decision-making process. I come from a project management background where my only concern is the project’s budget and not necessarily the companies. After reviewing the four steps of the Financial Management Cycle and with tons of management experience I have a few thoughts on where a manager can be most effective when ensuring that the financial plan is tracking according to plan.
In the first phase, planning, a manager is going to be relied on heavily to comprise an analytical assessment of last year’s numbers. To include; expenditures, projects completed, income, daily costs associated with operating a company, etc. It is important that the manager has accurate information to base his or her next year of financial budgeting.
Budgeting would be derived from the planning phase of this cycle and most likely will only require a touchpoint to the manager to ensure that the number reflects accurately. Managing operations, in my opinion, will be the most important focus of the manager outside of the planning phase. Assessing quarterly and semi-quarterly reviews of the budget will be necessary to ensure that the financial plan is on track. Lastly, annually reporting would serve kind of as a lesson learned. After analyzing your forecasted budget to what was spent you can further asses any adjustments that will need to be made for the following year. This is all done while taking in external factors that may affect the company’s budget.
Res #2 Issac:
Managers need to be engaged in all four stages of the financial management cycle. Beginning with planning phase, managers should work on identifying where the organization should be spending its funds to best achieve its goals. During this stage of the cycle, managers can conduct gap analyses and business case reviews to identify areas for improvement and potential solutions. These planning exercises can help identify areas in need of investment.
Once potential investments are identified, managers need to begin making decisions about which organizational activities will receiving funding, and in what amount. During the budgeting phase, lower level managers advocate for funding for their programs. But because resources are most often insufficient to cover all of the identified needs, senior managers must make tradeoff decisions. The final approved budget lays out the spending for the year and provides insight into the priorities of the organization.
After a budge has been set, companies enter the monthly operations stage of the financial management cycle. During this phase managers are directing organizational activities, which deplete the resources allocated in the budget. The goal of this phase is for managers to use the funds they’ve been entrusted with to accomplish the objectives of the organization. Managers monitor spending to ensure that budgets aren’t exceeded and that funds are spent wisely.
In the last phase of the financial management cycle, managers conduct annual reporting, which reflects on how funds were spent and how well that spending contributed to achieving the company’s objectives. The final stage of the cycle allows managers to compare results to their initial plan. This analysis can help shape budget planning for the next year by identifying effective and non-effective spending.
Berman, K., Knight, J, & Case, J. (2013). Financial Intelligence: A Manager’s Guide to Knowing What the Numbers Really Mean. Boston, MA: Harvard Business Review Press.