Overview

We all need to be financial managers in our daily lives: we need to match our expenditure with income, arrange a loan where there is a temporary shortfall in funds and invest money to make our future more secure.

The financial management attributes of organisations are no longer the prerogative and sole responsibility of higher echelons of management, but are now the day-to-day currency of all managers.

Broadbent and Cullen

(2003)

As money plays an important role in our private lives, so it does in the management of organisations. Commercial organisations exist primarily to make money.

Annual income twenty pounds, annual expenditure nineteen, nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery Mr Micawber in David Copperfield, Charles Dickens (1849 1850).

At work, non-specialists are sometimes reluctant to get involved in the finances of their organisations, but effective financial management is so central to success that it requires input from everyone within the organisation.

Your specialist skills are a barrier not a route to success. This advice to a young accountant starting his first job in industry perhaps holds a message for everyone. What it is saying is that managers can find a false security in their own specialisation, whether it lies in finance, production, marketing, human resources or research.

In today's fast-moving environment, this is clearly a recipe for disaster. To gain competitive advantage, all parts of an organisation must be able to talk to one another. It follows...