Finance and Accounting for Managers Essay:
The main role of a financial and/ or accounting manager is to give sound advice and support to colleagues and clients in the process of making sound decisions in their business. This is because financial considerations make the most vital part in the decision making process, as they determine how the day to day of the business will be affected in both the long term and short term. In addition, the business decisions made have to be in line with the laws put in place by the government and other relevant bodies. As such, their objectives have to put them in a position to carry out their roles effectively (Sloan, 2001).
The main objective of both the financial and accounting managers is risk management (Scott, 2014). This entails ensuring that the business avoids undue risks and pressure from financial situations that result from business decisions. Thus, they assess the financial viability of opportunities, long-term viability of loans and stability of investments made by the business. In order to do this, they have to have a proper understanding of the financial position of the entire business. They should also aim to improve the operation controls.
Although they are not responsible for the direct running of the accounts of the company or business, they have a major role of supporting accounting. They fulfill the objective of supporting accounting by reviewing the information provided by the accounting department for validity and accuracy. In addition, they give suggestions on valid corrective measures that will improve the financial position of the company (Sloan, 2001).
Another objective is to provide sound decision information. This is useful and vital because business management and owners most often use accounting and financial information to determine the best decision for the business. This objective requires the information provided o be accurate and relevant in order to be useful for the decision making process (Sloan, 2001).Financial and accounting manager serve as the intermediary between business owners and manager saving the owners time they would use going through information with no relation to the current business decision.
Challenges managers face in efforts to be socially responsible
The major challenge that managers face in the endeavor to make the organization a socially responsible business is the customer cynicism. Most customers have the idea that all efforts made by any business to be socially responsible have a hidden motive that benefits only the business. They take it as an advertisement strategy or a disguised campaign. For this reason, the business has to be careful not to appear as though they are boasting of the social responsibilities they have undertaken (Herman, 2011)
Another major challenge is that the business managers run the risk of lower profit margins. This is because the funds spent on the social responsibilities have no measurable profit returns to the business but benefits the community.(Herman, 2011). Finding social responsibilities that benefit both the business and the community is hard, and it is likely to be translated in to corrupt motivation by the community. Self-serving managers can exploit social responsibilities by undertaking projects that provide the best advantage to the business with the illusion of helping the community. This way, the manager realizes his/ her sales objectives without really helping the community.
In my opinion, budgeting processes plus strategic management accounting tools does not encourage a shareholder or stakeholder centric focus. Instead, they place the focus on the customer satisfaction, motivation of the stuff members and identifying and acquiring new talent. This is because the focus is not just on the short term or immediate success of the business. The focus is on the growth of the business ensuring the long-term and short-term objectives of the business concur, and that decisions made do not affect the future of the business negatively.
Mechanisms that might help mangers interest of shareholder or stakeholder
The first is Ownership Concentration. This represents the amounts of that institutional investors and individual shareholders own and purposes to eliminate problems resulting from separation of ownership and control of the direction the company or business heads. The second mechanism is conciliation of interest of shareholders with the interests of the employees and the customers. This makes it easier to ensure that the business does not have objects that contradict with any other of the company’s objectives (Scott, 2014).A project with a positive NPV means that the project will add value to business or the company. Therefore, a sound project is safe and profitable for the business to undertake (Ohlson, 2003).
Financial and accounting managers play a vital role in the success of the business. This is because they are responsible for assessing the viability of making a business decision. They also assess the accounting situations of the business and the investments made by the business preventing bad investments. They also save the owners’ time by acting as the intermediary between the managers and the owners. Thus, their value to the business cannot be underestimated.
Herman, R. D. (2011). The Jossey-Bass handbook of nonprofit leadership and management.John Wiley & Sons.
Ohlson, J. A. (2003). Positive (zero) NPV projects and the behavior of residual earnings. Journal of Business Finance & Accounting, 30(1‐2), 7-16.
Scott, W. R. (2014). Financial accounting theory.Pearson Education Canada.
Sloan, R. G. (2001). Financial accounting and corporate governance: a discussion. Journal of Accounting and Economics, 32(1), 335-347.
Finance and Accounting for Managers Essay: