Finance management can be defined as the application of managerial principles to the financial assets of a business organisation to achieve the financial goals of the company.

 More simply put it is the process of planning, organising, predicting and executing the decisions of a body to move itself closer to its financial goal. The general goal of a commercial organisation, simply put, is profit. Financial management is the tool to do so.

Financial management can be divided into two parts- macro financial management and micro financial management. Macro financial management deals with the commercial organisation with a more holistic approach towards the financial goal. It is related to the decisions that the organisation, as a whole takes, with its finance. On the other hand, micro financial management deals with the internal financial policies of the organisation. It is of more importance to the employee than macro financial management.

Macro financial management is directly involved in investment decisions, estimation of monetary requirements, choice of source of funds, and dividend decisions. This has a direct impact on the way an organisation ‘moves’ on the outside. Investment decisions imply proper utilisation and investment for the maintenance of current assets and procurement of future assets. Investment obviously is related to the source of capital and process of procurement of capital. The decisions regarding this also fall within the range of macro financial management. Macro financial management is of more interest, than micro financial management to a shareholder.

Micro financial management on the other hand deals with internal organisation policies and employee relation. On simpler terms, micro financial management is the hand behind raising the salary of an employee, or cutting it down. It is also indirectly related in the way the organisation ‘moves’ on the outside, but indirectly.

Generally an organisation has a whole department dedicated to financial management, with the usual employee hierarchy. As mentioned before, this department is responsible for generating all the data, analysing them, taking decisions and executing them (most of the times). In fact the specialisation of this department causes special office furnitures to be called in. The data files are either stored physically or more sophisticatedly in virtual space. Specialised storage solutions companies offer data management, for more secure and effective data storage. The process of financial data management is also known as Record management.

Financial management is rudimentary to any commercial organisation and is one of the basic requirements for an organisation to sustain itself and grow.