The fundamentals of financial management are laid in every area of economic activity carried out by business entities. At the same time, they quite successfully use special methods to influence finances in the event of the emergence of corresponding relationships.
They are characterized by such methods of financial management and uniform techniques such as financial planning, programming and forecasting. We must not forget about financial regulation, management in an expeditious manner and financial control.
Fundamentals of financial management in terms of planning and forecasting occupy one of the main places in the management system itself. It is during planning by any business entity that the general state of finances is assessed, the possibility of increasing the amount of resources is revealed and the direction of their most efficient use is determined.
Fundamentals of financial management using a tool such as planning are fairly effectively displayed when assessing the state of affairs in the near future. In other words, the analysis of prognostic information, the process of obtaining which is called "forecasting". A forecast represents a certain idea of future events, which are based on observations, generalizations and certain restrictions.
Financial forecasting serves as a justification for plans with an economic outlook for a specific period of time. Based on the practice, highlighted the long-term and medium-term forecasting of the financial activities of the enterprise. At the same time, the fundamentals of financial management in the field of forecasting are based on determining the actually possible volumes of resources with their needs in the planning period. These forecasts are a mandatory element in the implementation of financial policies. Among the generally accepted methods of forecasting it is necessary to distinguish methods:
- expert assessments;
- processing of temporal and spatial aggregates;
- situational analysis;
The structure of financial management would not be fully considered without such an important element as programming. This is a planning method that uses a program-target approach; it is based on goals (clearly defined) and the means to achieve them.
This financial management mechanism provides for: prioritization of expenditures in key areas, striving for greater efficiency in the use of resources, and suspension of funding when choosing another more acceptable option.
The choice of a specific program option primarily depends on economic and resource factors. It is necessary to take into account, in addition to the scale, the value and complexity of achieving the goal, the magnitude of the available reserves, the predicted overall effect and theoretical losses if the target is not achieved.