Fundamentals of financial management and their main elements

Fundamentals of financial management are laid in each area of implementation by business entities of economic activity. At the same time, they use the special methods of influencing finances rather successfully when appropriate relationships arise. They are characterized by such methods of financial management and common methods, as financial planning, programming and forecasting. We must not forget about financial regulation, management in an expeditious manner and the implementation of financial control.

Fundamentals of financial management in the implementation of planning and forecasting are one of the main places in the management system itself. It is during planning by any business entity that the general state of finances is assessed, the possibility of increasing the size of resources is revealed, and the direction of their most effective use is determined.

Fundamentals of financial management using tools such as planning are fairly efficiently displayed when assessing the state of affairs in the near future. In other words, analysis of prognostic information, the process of obtaining which is called "forecasting". The forecast is a certain representation of the events for the future period, which are based on observations, generalizations and certain limitations.

Financial forecasting serves as a justification for plans with a prediction of the economic situation for a specific period of time. Based on the practice, long-term and medium-term forecasting of the financial activity of the enterprise is singled out. At the same time, the basics of financial management in the sphere of forecasting are based on determining the really possible amounts of resources with their needs in the planned period. These forecasts are an obligatory element in the implementation of financial policy. Among the generally accepted methods of forecasting, it is necessary to distinguish methods:

- expert assessments;

- processing of time and spatial aggregates;

- situational analysis;

- simulation modeling.

The structure of financial management would not be considered fully without such an important element as programming. This is a method of planning, which uses a program-targeted approach, it is based on the goals (clearly articulated) and the means to achieve them.

This financial management mechanism provides for: setting priorities in spending in key areas, striving to improve the efficiency of resource use, and suspending financing when choosing another more acceptable option.

The choice of a particular version of the program primarily depends on economic and resource factors. It is necessary to take into account, in addition to the scale, the significance and complexity of achieving the goal, the amount of available reserves, the predicted overall effect and theoretical losses when the target is not reached.