1-B. The Reasons for Financial Management

By themselves, numbers usually don't mean much. But when you compare them to certain other numbers, you can learn a lot about how your organization is doing. For example, you can compare the planned expenses depicted on your budget to your actual expenses in order to see if your spending is on track.

Basic financial management includes activities such as managing the day-to-day operations, such as approving invoices to pay suppliers, reconciling indexes and budgeting. Financial management is also concerned with decision-making. In order to make right decision, it is necessary to have a clear understanding of the objectives. Such an objective provides a framework for right kind of financial decision making for evaluating the management of resources in attaining the institution's missions.