Prepared by: Dalia Meza.
Bachelor's degree in Public Accounting.
Entities must at all times move towards new changes over time, which forces them to promote mechanisms that allow them to examine accounting processes in order to make successful financial decisions. In this sense, financial management plays an important role since it provides key information, methods and tools facilitating decisions aimed at achieving planned objectives and meeting goals.
enlace Image used is Public Domain. Geralt 2017.From this point of view, financial decisions are represented by documents that provide information on equity at a given date and its economic and financial evolution over a period to facilitate economic decision making (Villegas, 2011).
Therefore, analyzing this type of information is of utmost relevance for the financial management of the entity, as it contributes to the review of the company's financial data.
In this regard, Chiavenato (2003) explains, "decisions are made to respond to a problem to be solved, a need to be satisfied or an objective to be achieved" (p.175). It is understood that financial decisions are a speedy way for the economic growth of the entities.
Finance is historically situated in the idea of control of the organization; that is to say, an entity or activity in general is under control when its development is constantly examined, allowing it to achieve the planned objectives, and in addition, it offers a foreseen and quantified accounting margin of error, ensuring that financial growth is within an established framework of financial management.
In this context, financial management expands its field of action linked to accounting procedures, facilitating the proper handling of information within a reliable and secure scenario for making effective decisions. Cepeda (cited in Mendoza, 2012).
Corresponding to the above, in Latin America, financial management has proven to be closely linked to important decision policies, since it requires a set of methods and measures adopted to safeguard resources, verify the accuracy and veracity of financial information, promote efficiency and quality of operations, and encourage compliance with prescribed policies, as well as to achieve compliance with programmed goals and objectives. Guillén (cited in Rondón and Hernández, 2017).
Based on the above assertions, it is essential to take into account financial management in the accounting process exercised by the entities, since it contributes to the improvement of financial information management, extending an appropriate accuracy at the time of decision making by management.
For its part, Lemus (2010), explains, the decision-making process, "is a set that includes four main stages; awareness of the need to make a decision; structure of the situation to the decision; choice of alternatives; action in the sense of the chosen alternative" (p.351). Because of this, it is essential that the entities express their management capacity in order to establish the accuracy of the accounting procedures developed.
Accordingly, Venezuela has been the scenario for the applicability of the International Financial Reporting Standards (IFRS) in financial management, adopting its characteristic of examining accounting processes. Beltrán (quoted in Parra, 2017). From this perspective, it is urgent to set accounting policies that allow optimizing accounting procedures, in order to provide financial data to those responsible for the entities, so that accurate and timely decisions can be made.
According to Oscar Leon (quoted in Muyulema, 2011), financial management "seeks to achieve the maximization of shareholders' wealth through daily activities, such as credit and inventory management through long-term decisions related to fund raising" (p.16). Therefore, in the financial processes it is of utmost relevance the management of actions in order to ensure the reliability of finty.ancial data in order to make effective decisions and adjusted to the achievement of objectives planned by the enti.
Consequently, it is necessary that the accounting processes where financial management is involved are ensured through controls in order to allow the company's management to make effective decisions.
Financial Management Objectives:
The financial function, which can be considered as the source that radiates to the other areas of the organization as it is in charge of obtaining and assigning the necessary resources for the development of the business operations. It is pertinent that the development of management contributes with an adequate management of the accounting process. For Cordoba (2012:424), he points out the following specific objectives.
Generation and procurement of resources:
Encompasses the process of making decisions and undertaking actions related to financial resources, including their achievement, utilization and control.
Efficiency and effectiveness of resource utilization:
It includes a description of the financial resource requirements, including a statement of needs, specification of available resources, forecast of resources to be disbursed and calculation or estimate of the resources that would have to be obtained through external financing.
Financial management indicators.
Companies use financial indicators because, through their calculation and interpretation, they can detect failures and adjust the operating and financial performance of the organization. Among the main financial ratios are the following: liquidity, solvency, efficiency, financing, profitability, productivity, market and stock market ratios, among others.
Decision Making.
Making a decision implies providing an answer to a given problem, i.e., an alternative is chosen to address the organization's problems, whether managerial, administrative, strategic or operational. In the same way, decisions are made in response to a given problem to be solved. Therefore, decision making includes a process, i.e., a sequence of steps or phases, hence the name decision process or decision making process. (Portillo, 2013:34).
In this sense, in the accounting field, a decision is determined by the financial data base that operates an entity fully verified, therefore, it is essential to audit the finances in companies since it favors the search for reliability and speed of information.
Finally, it can be said that financial management is the most important part within organizations, and the analysis of the appropriate financial indicators will allow us to know the current situation of the company, take corrective actions in the short, medium and long term in order to optimize resources and achieve the objectives initially set.
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