Definition of Financial Management has developed from the definition of management that only prioritize to the activity of obtaining funds until the activities of obtaining and using funds and management of assets. Financial Management (Finance Management) is the entire activity or activities of the company in the context of the use and allocation of company funds efficiently. According to George R. Terry, management includes four activities often known as POAC (Planning, Organizing, Actuating, and Controlling)
According to Bambang Riyanto: financial management is all company activities related to the procurement of funds required with minimal cost and most favorable conditions with efforts to use the funds as efficiently as possible.
Concept of Financial Management
To perform its functions, a company must perform the functions well, since in the implementation, each function relates each other. Financial management is the management of the financial functions. Meanwhile, the function of finance is the main activities performed by those who are responsible in the particular field. The functions of financial management are using and placing the funds.
Financial management is all company activities related to how the company obtains funds, uses the funds and manages assets in accordance with the overall company's objectives.
Financial management is related to three activities:
Activity of fund use, it is the activity to invest funds in various assets.
Fundraising activity, it is activity to obtain funding sources, both from internal and external funding sources.
Asset management activity, after funds are obtained and allocated in the form of assets, the funds should be managed as efficient as possible.
Financial management is all activities by asset acquisition, financing and management with some overarching objectives. Therefore, decision-making functions of financial management can be divided into three main areas: decisions in respect of investment, financing, and asset management.
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