This document discusses the relationships between various management functions and financial management. It outlines how financial management interacts with and supports marketing management, materials management, production management, human resources management, cost accounting, financial accounting, assets management, and economic management. Key interactions include providing funding, analyzing costs and feasibility of projects, developing inventory and pricing strategies, and ensuring efficient use of resources.

2. Kunal Meghani - 42
Harsh Nakhva - 52
Kashyap Katarmal -18
Gopal Makvana - 33

3. INTRODUCTION
• Financial management refers to the efficient and effective management of money funds in such a manner as to
accomplish the objectives of organisation. It is the specialized function directly associated with the top management.
• Financial management refers to that part of the management activity which is concerned with the planning and
controlling of firm's financial resources. It deals with finding out various sources for raising funds for the firm.

4. RELATIONSHIP OF FINANCE MANAGEMENT WITH OTHER
MANAGEMENTS
• Material management
• Production management
• Marketing management
• Human resource management
• Cost accounting
• Assets management
• Financial accounting
• Economic

5. MARKETING MANAGEMENT WITH FINANCE MANAGEMENT
• The marketing department is concerned with the selling of goods and services to the
customers. It is entrusted with framing marketing, selling, advertising and other related
policies to achieve the sales target.
• It is required to frame policies to maintain and increase the market share, to create a
brand name etc. For all this finance is required, so the finance manager has to play an
active role for interacting with the marketing department.

6. • The financial manager closely work with the marketing manager. The marketing manager
involves in product survey, demand analysis and forecasting of the sales volume for the given
price.
• The marketing manager also involves in new product development, expanding marketing
territory, pricing of the products etc. These functions of the marketing manager have
financial implications.
• The financial manger closely works with marketing manager in these issues in order to
analyze develops the promotion and pricing strategies. Similarly, the finance manager
suggests the best inventory policy. Also the finance manager analyses the feasibility of the
project.

7. MATERIAL MANAGEMENT WITH FINANCE MANAGEMENT
• The financial management and the material department are also interrelated. Material department covers the
areas such as storage, maintenance and supply of materials and stores, procurement etc.
• The finance manager and material manager in a firm may come together while determining Economic
Order Quantity, safety level, storing place requirement, stores personnel requirement, etc.

8. • The costs of all these aspects are to be evaluated so the finance manager may come
forward to help the material manager.
• The finance manager acts as the bridge between the sales department and production
department. The inventory manager develops the inventory policy considering the
requirement of both production department and the marketing department.

10. PRODUCTION MANAGEMENT WITH FINANCE MANAGEMENT
• The financial management and the production department are interrelated.
• The production department of any firm is concerned with the production cycle, skilled and unskilled labour, storage of
finished goods, capacity utilisation, etc. and the cost of production assumes a substantial portion of the total cost.
• The production department has to take various decisions like replacing machinery, installation of safety devices, etc. and
all the decisions have financial implications.

11. • The production department is responsible for the development and manufacturing of the product.
It is also responsible for the quality control.
• The inventory manager acts as the bridge between the sales department and production
department. Similarly, the finance manager works in coordination with the sales department and
production department in order to decide whether an investment proposal is to be made or not.
• The capital budgeting manager uses the revenue forecast from the sales department and production
volume and costs from the production department in order to analyze an investment alternative.
Thus, there is close relationship between production management and financial management.

12. HUMAN RESOURCE MANAGEMENT WITH FINANCE
MANAGEMENT
• The personnel department is entrusted with the responsibility of recruitment,
training and placement of the staff.
• This department is also concerned with the welfare of the employees and their
families.
• This department works with finance manager to evaluate employees’ welfare,
revision of their pay scale, incentive schemes, etc.

13. • Human resource management involves in the recruitment and selection of the
employees. It definitely involves cost.
• The costs of human resource are analyzed in capital budgeting decision by the capital
budgeting manager. Similarly, the treasure works closely with human resource
department regarding the pension fund management and different incentive policies to
the employees.

14. COST ACCOUNTING WITH FINANCE MANAGEMENT
• Most of large companies have a separate cost accounting department to monitor expenditures
in their operational areas.
• The cost information is regularly supplied to the management for control purposes. The finance
manager is concerned with proper utilization of funds and, therefore he is rightly concerned
with operational costs of the firm.
• The information supplied by cost accounting is of utmost importance to him and he makes
suitable recommendations to keep costs under control.

15. FINANCIAL ACCOUNTING WITH FINANCE MANAGEMENT
• Financial management and financial accounting are entirely distinct from each other. Financial
accounting is concerned with the recording, reporting and measuring of economic transactions.
• Financial accounting is a data collection process dealing with accurate recording and reporting,
while financial management is managerial decision-making process.
• P&L account discloses the profit made by the business over a period of time. “Earning per share is
the concept which is of vital interest to financial manager which in turn depends on profit”. Thus,
both finance and accounting are concerned with the ascertainment of profits.

16. • Decision regarding investment on assets are taken by finance manager though the technique of
capital budgeting. However, it is the accounts department which feeds the finance manager with
the necessary data.
• One of the important functions of finance manager is the proper working capital management. For
this purpose, cash budget is prepared. Inventory level is decided and credit policy of the company is
determined. The information required for taking decisions with regards to above is provided by the
accounting section.
• Thus, although accounting and finance management differ from each other in many respects, yet
they both of them are a must for every organization as they perform complementary functions to
each other.

18. ASSETS MANAGEMENT WITH FINANCE MANAGEMENT
• Assets are resources necessary for conducting the activities of the firm. They include both long term assets
and current assets.
• The acquisition of assets, their proper maintenance involves finances. Similarly, the effective utilization of
assets also effects the firms finances.
• Hence, the financial manager is concerned with both acquisition and utilization of the firms assets.
Together with other officials of the firm, he takes decisions regarding current and future utilization of the
firms assets.
• The composition of mixed assets for achieving the firms goal in the best possible manner is also a matter of
joint decision of the financial manager with the other concerned officials of the organisation.

20. ECONOMIC MANAGEMENT WITH FINANCE MANAGEMENT
• The field of finance is closely related to economics. Financial managers must understand the economic
framework and be alert to the consequences of varying levels of economic activity and changes in
economic policy.
• They must also be able to use economic theories as guidelines for efficient business operation.
• The primary economic principle used in managerial finance is marginal analysis, the principle that
financial decisions should be made and actions taken only when the added benefits exceed the added costs.
Nearly all-financial decisions ultimately come down to an assessment of their marginal benefits and
marginal costs.