Financial activity is the basis for successful operation of enterprises

Financial activity is carried out by any enterprise, regardless of its form of ownership. It consists in the organization of financial relations that appear in the process of interaction with other individuals or legal entities. Such relationships are an integral part of money that arise during the movement of funds.

Financial activity is a complex system of actions, the purpose of which is the successful formation of initial capital with the subsequent proportional provision of such actions: the formation and use of income and other financial resources, the fulfillment of obligations.

This system uses different methods and forms to ensure the successful operation of enterprises and the implementation of the set goals. In other words, it represents a practical financial activity of the enterprise, ensuring its life activity and increasing its effectiveness.

One of the main goals of financial activity is the economic impact carried out with respect to partners and ensuring the fulfillment of their contractual obligations. Another goal is to ensure a constant circulation of funds necessary for the successful management of the enterprise, the implementation of the necessary payments and expenses, as well as profit (in monetary terms).

Financial activity implies the timely identification of the main causes of the disruption of such a circuit, which allows time to make management decisions to eliminate them. Making informed decisions is possible only if the accuracy and completeness of accounting is taken into account. Effective financial activity of the enterprise is the basis for ensuring that money incomes exceed expenditures. It allows you to make the necessary investments, the formation of reserves and funds designed to compensate for losses or damage.

Receipt of proceeds from the provision of services and the sale of goods ensures an uninterrupted business process and a constant circulation of money. Until then, all production costs are financed from previously formed current assets. The result of the circulation of the invested funds is the reimbursement of the costs incurred and the creation of their sources of financing in the form of profits and depreciation.

Management of financial and cash flows of the organization, related to each other, is carried out through financial management. The movement of the financial flow entails a decrease or increase in the cash flow. Regulation of the financial flow ensures the receipt of funds necessary for the enterprise. In the course of choosing an acceptable variant of the financial solution, the following points are determined: the real possibility of implementing this option; The change in indicators by means of which the financial condition is assessed for the nearest periods or for a long-term perspective; Associated incomes and costs; Conditions for implementing the solution; Other consequences of this option.

Financial management solves a wide range of issues, including the entire set of financial and economic activities for obtaining and spending money. It has its own structure, which includes financial analysis (based on accounting data) and probabilistic estimates of future indicators (economic planning). Financial management is an active management of the financial condition of any enterprise with the help of all factors that affect it.

At the enterprise, his manager is responsible for the financial work. According to his instructions, the financial director is managed by the financial director, and in case of his absence - by the chief accountant. As a rule, the finance department is organized in the accounting department, but sometimes it is a separate structural unit.