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What is financial management?

An introduction to the key definitions of financial management that are relevant to construction projects.
© Coventry University. CC BY-NC 4.0 Image © Getty Images

As you may have noticed from the previous task, financial management has diverse implications for companies and individuals.

Financial management is a method for planning and organising the activities of funds. For companies, it is aimed at the effective procurement and utilisation of funds. For individuals, it is meant to manage earnings in order to have good financial health and stability in future.

From a general point of view, the management of finances is nothing but the planning of expenditures and incomes to ensure financial stability. Financial stability implies the availability of sufficient money when it’s required. It is a key concern for many entities.

Entities may include:

  • Companies – sourcing and investment of funds

  • Individuals – planning for future expenditures and income

  • Government – utilising public money in the most efficient manner

  • Non-profit organisations – planning of funds required for activities

In the next step, we’ll look at financial management in the context of the construction industry.

© Coventry University. CC BY-NC 4.0 Image © Getty Images
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An Introduction to Financial Management in Construction

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