Financial management requires ethical standards and reporting practices. Financial management is defined as the management of the finances of a business or organization in order to achieve financial objectives. The key objectives of financial management are to create wealth for the organization, generate a positive cash flow, and provide an adequate return on investments. In order for a health care organization to receive federal funds, they are required to have an effective financial management system. If an organization fails to accurately maintain their financial records, this could cause the organization to lose money.
Although there are some powers that be that stress only three elements, there are four elements that are standard in financial management. The four elements of financial management are planning, controlling, organizing and directing, and decision making. The purpose of the planning element of financial management is to identify objectives and then to identify the steps required for accomplishing these objectives. A financial manager identifies the steps that must be taken to accomplish the organization’s objectives. The purpose of the controlling element of financial management is to make sure that plans are being followed. The financial manager makes sure that each area of the organization is following the plans that have been established by interacting with other managers within the organization. Managers can also make sure that each area of the organization is following the plans that have been established by studying current reports and comparing them with reports from the past. The purpose of the organizing and directing element of financial management is to make sure effective resource use and provide daily supervision. The financial manager decides how to use the resources of the organization to effectively carry out the plans that have been established when organizing. Directing calls for the manager to work on a daily...
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