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Students of financial management tend to argue that the benefit may be obtained in the short term or long term and that it may have the characteristic of total profit or benefit ratio before or after taxes. In addition, the benefit obtained by managing may be related to financial capital that is being used, with total assets or capital to shareholders. If that profit maximization is the main objective, then that’s where the question arises where arises which of these variants of benefit to meet in order to maximize a company. Needless to say that an expression as vague as “benefit” can not form the basis of financial management.

Moreover we have the periodicity of the benefits of financial management is basically a technical objection that it is much more important than profit maximization, since in this case, the frequency functions as a guide for senior executives a company can proceed with decisions concerning the financial management ignores differences expressed between the benefits received from different periods of courses of action and investment opportunities. This means that the decision is taken on the total of all benefits received, regardless of when received.

Finally we have the quality of benefits and it is the most important technical limitation that we noted in maximizing the benefit of financial management, since it acts as an operational objective that ignores the aspect of quality associated with a course of action in financial management. When we speak of quality we mean the level of certainty with which it can create expectations for the benefits. Anyway, as a rule, it is important that the more certain is the expectation of profits, much higher quality will be holding them when to get them. Conversely, the lower the quality of benefits, involve risks to investors. The problem comes with uncertainty, means that profit maximization is hardly adequate as an operational criterion for financial management, as in this case, only considering the magnitude of benefits and is not weighted the degree of uncertainty that can reach the expected benefits arise in the future.

Managing Financial is inextricably linked to corporate management, since all the company’s business is a reflection of their performance in the network of exchanges involving the corporate dynamics. Hence the importance that employers take a responsible decision-making and enable their organizations to operate profitably.

From the selection of products and services, procurement, inventory, finance and pricing and discounts to the markets where it competes, human resources, technologies, installed equipment and planning, all due to the financial management and makes it the center of the process, as well as an evaluation space to know what investments to make and how to get the capital to afford them.

Each of these decisions is to some extent a correct or incorrect performance positively or negatively impact the value of the company’s economic, while the difference between successful companies and those that overshadowed the performance of its objectives err in their choices. Read the rest of this entry »

In order to make good decisions during the development of an enterprise is essential to have a clear understanding of all the objectives to be targeted, since they are the ones who provide a framework for optimization decisions for the nature financial management.

In this sense we can say that there are two existing approaches used by companies today, the first of them is profit maximization as a decision criterion. This aspect of financial management is composed of rationality that lies behind the optimization of benefits to provide guidance in situations where they must make decisions according to circumstances.

Generally, the main benefit obtained by this feature of financial management is an analysis of the economic efficiency of the company. The same facilitates judgments about economic performance as well as lead to financial management to an efficient use of resources, in the moments where they tend to be directed to uses that are often the most convenient in terms of profitability. Financial management is usually directed toward the efficient use of one of the most important economic resources: capital. That is why it is argued that the maximization of profitability then should function as a basic criterion for decisions to be taken in Regarding the development of financial management. However, this same criterion of maximizing the benefit has been continuously questioned and criticized based on the difficulty of its application in most situations that arise in the real world.

The main reasons that have developed these criticisms are, on one hand the ambiguity is very important in this regard we note that a practical difficulty in terms of the maximization criterion is that the term “benefit” is a vague concept especially ambiguous, which means that it has no connotation to be accurate. It represents a susceptibility to the different interpretations held by different people.

Organizational objectives are used by financial managers as a decision criterion in financial management. This implies that what is relevant is not the overall objective of the company, but operationally useful criteria by which to judge a specific set of decisions.

Businesses have many goals, but none of them can be achieved without causing conflicts towards achieving other objectives.

These conflicts usually arise because of the different purposes of the groups, one way or another, involved in the company, which include shareholders, directors, employees, unions, customers, suppliers and lenders.
The company can define its objectives from different points of view as in:
The maximization of sales or market share.
Providing quality products and services .
In the long term, the company has responsibility for the welfare of society.
The company must be managed according to the interest of shareholders.
You can also see the reunion of some or all of the factors described above, but the important thing is how the company’s financial management influences these organizational objectives. Decisions Financial Decisions made ??by those responsible for the financial area should be based on policies related to investment, financing and dividend policy consistent

Financial management is one of the traditional functional areas of management, found in any organization, competing analysis, decisions and actions related to the financial means to the activity of the organization. Thus, the financial function includes all tasks related to achievement, use and control of financial resources.

That is, the financial function includes:
· Determining the needs of financial resources (needs approach, description of available resources, provision of the resources and calculation of external financing needs);

· Achieving funding according to its most profitable (taking into account the cost, schedule and other terms, fiscal conditions and the financial structure of the company);

· The judicious use of financial resources, including cash surpluses (so as to obtain a balanced financial structure and adequate levels of efficiency and profitability);

· Financial analysis (including the collection well, although the study of information so as to obtain definite answers on the company’s financial situation);

· analysis regarding the economic and financial viability of investments.

In the interest of”fast”growth of your business, some entrepreneurs turn to factoring.

Factoring is a financing option. The results are short term. Contacting a factoring company has the opportunity to sell their existing accounts to ensure growth of the same.

Can sometimes also in administrative support, collections, market research and other services.

What does a factoring company?

• The factoring company will buy the accounts receivable and will pay in advance.

• You will investigate the debtors, and provide a report with data on their current state of solvency to know the possibilities of recovering the debt.

• It takes over the collection process of the portfolio of debtors who bought: the management and control.

• Continually being briefed on how the company is the collection process, and the status of accounts receivable.