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The Role of Financial Manager In The Case of Amhara Pipe Factory

By Animaw Yayeh
2/18/2012

MBA University of Gondar - Special Arrangement

Introduction
 The ever increasing of organizations socially and as per

the interest of owners has contributed a lot for the emergence of financial management as a distinct management discipline.  The role of financial manager can be best understood by analyzing the definition of financial management.  Financial management is an integrated decision-making process concerned with acquiring, financing, and managing assets to accomplish some overall goal within a business entity.
2/18/2012

MBA University of Gondar - Special Arrangement

Introduction Contd
 The duties and responsibilities of the financial manager are

far reaching.  In broad terms, the two main functions of the financial manager concern acquiring and allocating funds among a firms activities.  For this reason the financial manager acts as a liaison between other departmental managers and the General Manager of the organization.  In todays rapidly changing environment, the financial manager must have the flexibility to adapt to external factors.
2/18/2012

MBA University of Gondar - Special Arrangement

The Roles and Responsibilities of a Finance Manager


 The role of financial manager is to balance the inside

and outside pressures of the organization that he is appointed.  The internal and external financing maters aims at keeping the organization strong and healthy so as to be competent in the market.  These include the identification of risk and the means to minimize.

2/18/2012

MBA University of Gondar - Special Arrangement

The Roles Contd


 Financial analysis and planning - is concerned with

determining the proper amount of funds to employ in the firm. The financial planning including
    assessing the funds requirement, identifying and sourcing funds, allocation of funds and income and controlling the use or utilization of funds towards achieving the primary goal of profit/wealth maximization.

 It also consists of the evaluation of the financial

condition and operating performance of a.


2/18/2012

MBA University of Gondar - Special Arrangement

The Roles Contd


 Investment decisions - a decision that is concerned with

the use of funds in buying, holding, or selling of all types of assets that have some return sometime in the future. The efficient allocation of funds to specific assets or investment.  Financing and capital structure decisions - are concerned with the acquisition of funds or the raising funds on as favorable terms as possible to be used for investing and financing day-to-day operations. Capital structure decisions aims at determining the composition of liabilities and equities to start up the business.
2/18/2012

MBA University of Gondar - Special Arrangement

The Roles Contd


 Management of financial resources - Focus on the

management of current asset and current liability (working capital).  Risk management - The financial manager determines the appropriate riskreturn tradeoff to maximize the value of the firms stock or wealth. Financial decisions involve a riskreturn tradeoff in which higher expected returns are accompanied by higher risk.

2/18/2012

MBA University of Gondar - Special Arrangement

The practice in Amhara Pipe Factory


 Habitually, the management of business finance which

is performed by accountants who focused on reporting and organizing financial data are seldom involved in the decision-making process.  The accounting function is basically paper-driven and human resource intensive, and accountants functioned more or less as clerks.  However there is an increasingly improvement in the use of different softwares in todays advances in IT, as a result of the competitive pressures of globalization and corporate restructuring.
2/18/2012

MBA University of Gondar - Special Arrangement

The practice in Amhara Contd


 Structurally the financial manager of the factory has six

employees under its direct responsibility (the purchaser, the casher, two accountants and two store keepers).  There is no as such a clear cut duties and responsibilities for the financial manager and is a joker to experience the failure and the success of the factory being so proactive than the rest of the employees under his supervision.  The financial manager duties are far to be managerial instead so operational and routine.

2/18/2012

MBA University of Gondar - Special Arrangement

Duties of the financial manager


 ordering of purchase in a national and international level    

and fulfilling the requirements thereof. facilitation of loading and unloading of raw materials purchased. facilitation of documents for the payment signing of checks and payment vouchers by verifying the necessary documents. writing letters to the concerned parties in relation to payment and other activities.
MBA University of Gondar - Special Arrangement

2/18/2012

Duties of the financial manager Contd


 supervise the work of the employees under his   

supervision. approve, correct and produce financial statements. check the availability of the raw material for the factorys continuous operation. accept sales request from different customers of the factory via the sales department and collect sales revenue. participate in the decision making activities of the factory.
MBA University of Gondar - Special Arrangement

2/18/2012

In Sum
 The financial manager tries to have an organization that

is profitable and highly valued in customers.  This is being exercised in a routine and traditional way than being strategic and based on modernization in management practices and acceptance of tools to handle resources in an effective manner.  Even though, the financial management practice is being exercised in unorganized and in-expertise way.

2/18/2012

MBA University of Gondar - Special Arrangement

Comment
 The financial manager has to play a variety of important

roles in creating and maintaining an effective and successful financial management in the factory including:  Providing leadership in the cost-effective use of an organizations financial resources by employing effective general and financial management practices;  Involving actively in organizational decision-making by providing timely and reliable financial and performance information and by analyzing the implications of this information in relation to the achievement of the factorys goals and objectives;
2/18/2012

MBA University of Gondar - Special Arrangement

Comments Contd
 Ensuring that the organizations resources are

protected from waste, fraud, and abuse by improving its accounting systems and internal controls.  Consider competencies to utilize more in the factory and outside of the factory if any.

2/18/2012

MBA University of Gondar - Special Arrangement

Thank You!!!

2/18/2012

MBA University of Gondar - Special Arrangement