management of money in such a manner as to accomplish the objectives of organization
Financial management refers to the efficient and effective management of money (funds) in such a manner as to accomplish the objectives of the organization. It is the specialized function directly associated with the top management. T
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- The ability to accurately predict cash flow is the best, most universal, and most consistent standard for financial management across all nonprofit institutions, regardless of size and mission.
- Richard S. Linzer, Anna O. Linzer (2006). The Cash Flow Solution: The Nonprofit Board Member's Guide.
- Another forerunner of modern organization theorists was Andrew Ure, a professor of chemistry. An enthusiastic proponent of “the factory system,” Ure (1835) took a step beyond Adam Smith. Whereas Smith’s pin factory was solely an example of division of labor, Ure pointed out that a factory poses organizational challenges. He asserted that every factory incorporates “three principles of action, or three organic systems”:
- (a) a “mechanical” system that integrates production processes,
- (b) a “moral” system that motivates and satisfies the needs of workers, and
- (c) a “commercial” system that seeks to sustain the firm through financial management and marketing.
- Harmonizing these three systems, said Ure, was the responsibility of managers.
- William H. Starbuck (2005). "The Origins of Organizational Theory," page 149-150
- Historically, information management has been a fragmented activity shared among the traditionally independent elements of an organization. Many of the critical data-handling activities (payroll, invoices, payments, inventories, etc.) of an organization have been located in the administrative or financial management offices. Automation of these activities has resulted in placing management responsibilities for computers and information systems in the office of an organization's administrator or controller.
- United States. General Accounting Office (1981) Department of Agriculture Needs Leadership in Managing Its Resources. p. 21.