Using Business Finance
Finances are a crucial aspect in the management of money used within an organization, business or in an individual’s life. Business finance concepts are widely taught in schools with a majority of students choosing it as a career. People apply these concepts to increase productivity in their workplaces and personal finances. As a student, I have gained vast knowledge and skills in business finance that have helped me make informed decisions on how to use my money. From these concepts, I now understand the factors influencing decision making in finance.
Business finance not only monitors the spending, but also the amount of money saved for future use. There are a number of steps that lead to effective financial management. They include financial assessments, budgeting, goal setting, planning and investing. Performing a financial assessment is a key element towards financial success. Assessment helps an individual to understand their spending patterns and in-turn know what to prioritize or eliminate. The assessments help in budgeting and projection of future expenses and savings.
Budgets control the amount of money spent and minimizes on impulse buying. They increase the rate at which a business or an individual saves by making them live within their budgets. Money is saved to make goals set for the future achievable. With goals, one can prioritize on how and what to spend on first. Goals could be long or short term depending on the span of time they cover. Short-term goals are carried out within a span of days or even months while long-term goals take a number of years before their completion.
Goals are never serious if is there are no plans laid out to achieve them. This makes planning a crucial component in business finance. Executable financial plans follow a sequence of financial activities and have many details. Planning makes an individual or an organization to undertake financial risks and set financial strategies of attaining them. Successful businesses take risks that give them ample rewards in return. A common way of risk taking is through investing into properties or other businesses.
