Chapter Six
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FINANCIAL MANAGEMENT IS BEING IN CONTROL
In fulfilling the strategic aims of the company, financial managers are
responsible for making sure not only that the company has the necessary
resources in terms of investment, assets and people, but also that there are
appropriate operating controls and procedures for managing business risk
and making sure that all finances that flow through the business are
properly accounted for (Tennent 2008: 2). Thus, financial management
can be perceived as a linear progression of tasks where after a stage of
setting concrete objectives follows a phase of “measuring actual progress
towards them” and “controlling variances from plan by making quick, well
considered and rational decisions” (Patterson 2011b: 155).
The proposed conceptual metaphor FINANCIAL MANAGEMENT IS
BEING IN CONTROL is also related to the more general metaphor where
the financial state of a business organization is perceived as the state of
health of a living organism. A financial manager, like a doctor, examines
and controls the financial situation of a company:
Medical doctors assess the health of people. Financial managers assess the
health of businesses. When you visit a doctor for an examination, the
doctor may check your blood pressure, heart rate, cholesterol, and blood
sugar levels. The results of each test should fall within a range of numbers
considered “normal” for your age, weight, gender, and height. (...) Like
doctors, financial managers check the health of businesses by running
basic tests – such as a financial ratio analysis – to see whether a firm’s
performance is within the normal range for a company of that type. If it is
not, the financial manager runs more tests to see what, if anything, is
wrong (Gallagher and Andrew 2007: 88).Treasury people must always use easily explicable approaches, the most
successful being those that are simple at the start. They must reconcile this
factor of simplicity with the fact that new knowledge means discovery, and
discovery requires much know-how as well as a great deal of imagination
(Chorafas 1992: 13).Good financial management includes tracking the overall system of
income and expenses as well as timing of when funds are available and
when expenses are incurred. Internal controls safeguard the organization’s
resources and work to ensure that an organization’s plans and policies are
implemented and decided upon.
(http://portal.hud.gov/hudportal/documents/huddoc?id=FBCIFinancialMg
mt.pdf).