A society needs different people holding different profession so that they can contribute their various skills to the development of their society. But if you look at Muslims they tend to obtain popular and traditional business that give an immediate reward. then, our society could not be developed as a progressive nation and can be left behind anyway. thus, we should try to train our youths of various professions and skills without further delay, so let's have a look at various types of profession including financial manager.
Financial Manager is the management of business funds.[1] Financial manager is one of the board directors in a company which is a top manager. A top manager is an upper-level executive who guide and controls an organization’s overall amount of money. In one production, financial manager may act as a vice president as a chief financial officer. There are two categories who work under this section which are treasurer and controller. Moreover, under treasurer management, there were capital budgeting, cash management, commercial banking and investment banking relationships, credit management, dividend disbursement, financial analysis and planning, investor relations, pension management, insurance risk management and tax analysis and planning. While under controller management, there were cost accounting, cost management, data processing, general ledger (payroll, accounts receivable or payable), government reporting and internal control, and preparing financial statement.[2] A financial manager is responsible for providing financial advice and support to clients and colleagues to enable them to make sound business decisions. Specific work environments vary considerably and include both public and private sector organizations, such as multinational corporations, retailers, financial institutions, charities, manufacturing companies, universities and general businesses. Financial managers may also be known as financial analysts or business analysts. A financial manager also concerned the most with their finances. They study its debts and receivables, future capitalization needs, financial statements and other accounting information.
Being a financial manager is not an easy work. There are many requirements that a person need to qualify and verify to get this work and be promoted. The minimal qualification is having relevant postgraduate certificate but usually it need a further study for professional qualifications to get promoted from the boss. Some of the qualifications that a person need to have to get this excellent communication skills to deals with external and internal factors like lenders and suppliers, other managers and workers, investors and stockholder and government; an analytical approach to work in identifying problems correctly, generate reasonable alternatives, and select the best alternative to solve the problems[3]; problem-solving skills and initiative like what people had been through, the more knowledge you have and gained, the more rational and patience for you to handle a situation and problematic situations; strong attention to detail and an investigative nature; the ability to balance the demands of work with study commitments; good time management skills and the ability to prioritize; the ability to work as part of a team and to build strong working relationships; the ability to make quick but rational decisions; the potential to lead and motivate others; good IT skills in using computer and software.
Every financial manager must have their own personally task that have to perform to promote themselves. The roles of financial managers vary significantly. The generic nature of the job title can be misleading as the level and scope of the responsibilities involved in any role can differ enormously. In larger companies for instance, the role is more concerned with strategic analysis, which is the process of conducting research on the business environment within which n organization operates and on the organization itself, in order to formulate strategy whereas in smaller organizations, a financial manager may be responsible for the collection and preparation of accounts such as account receivable, account payable, income statement, balance sheet and various types of account[4]. In general, tasks across roles may include providing and interpreting financial information; monitoring and interpreting cash flows and predicting future trends to know the capability of that company to pay its own debts; analyzing change and advising accordingly; formulating strategic and long-term business plans to maintain business growth; researching and reporting on factors influencing business performance; analyzing competitors and market trends; developing financial management mechanisms that minimize financial risk; conducting reviews and evaluations for cost-reduction opportunities; managing a company's financial accounting, monitoring and reporting systems; liaising with auditors to ensure annual monitoring is carried out; developing external relationships with appropriate contacts, e.g. auditors, solicitors; producing accurate financial reports to specific deadlines; managing budgets; arranging new sources of finance for a company's debt facilities; and supervising staff.
In addition, a financial manager should always make an efficient financial decision to maximize all people’s satisfactions. In the words of Ezra Solomon, the basic rationale for the objective of wealth maximization reflects the most efficient use of society’s economic resources and this leads to a maximization of society’s economic wealth. There are two major objectives of finance management which is profit maximization and wealth maximization. First and foremost, profit maximization is a perfect competition between businesses. One, it is hand in hand with risks means that the more profitable the business, the riskier a business can be. Second, must ignore the timing of profit to be received[5]. Third, Financial manager should always connect with lenders and customers and keep dealing with stockholder and investor to promote and ask them to invest more capital to the company which ensure the supply of future capital for innovation[6]. While the other objective is wealth maximization which maximizing the net present value of any course of action and the firms. Net present value is different with net cash flows. Following are the various elements of wealth maximization, which future expected in cash inflows rather than cash money others increase in profits. Furthermore, takes care of risk factors associated with the project as the discount rate used for calculating present value. Others maximize owner’s economic welfare and judicious choice of funds value. Planning new strategies with the other managers in reducing cost and expenses and minimized risk.
Finance is the circulatory system of the economic body of a firm. The importance of a financial management is to maximizing shareholder’s wealth[7]. Following are the various importance of financial management to a firm. Firstly, financial management is a management of money matters. Financial management is very vital for both individual and organization. It deals with managing the funds and guides a company and individual to make optimum use of money to achieve the maximum returns which is highest profits. Furthermore, it helps individuals and firms to manage debt through debt management. It also helps in planning for retired person and the one who want to join and invest a total amount of money in an organization. Financial managers must always study and update with the balance sheet in order to ensure that all transactions are not even close to loss and bankrupt. Financial managers use and adapt different types of accounting tools to manage and control the finance like ratio. Many types of ratio is being use, for instance profitability ratio, short-term financial ratio and activity ratio. Profitability ratio is to indicate the firm is profitable by net income taxes with returns on sale, return on Owner’s equity and earning per share. Short-term financial ratio is to evaluate a firm’s ability to pay its debt which is current liabilities like working capital, current ratio and acid- test ratio. While, two activity ratios allow managers to measure how many times each year a company collects account receivables and sell its inventory[8].
Society in here can be clarifying as the individuals and organizations itself. The impact of hiring a financial manager to manage all finances in the company are it can help one to save more in capital and resources like a company can produce one important resources instead of buying that resources with higher price and thus can invest more by preparing a good proposal to send to all investor and shareholders. When a financial manager get an idea for a new strategy on how to reduce expenses. Indeed, it will result for all people to save more. It is also help others on spend less and earn more; this will lead to more savings and thus create a secure future. Then, the impact also help people by guiding them to create a financial plan whereby all the debts are paid on time. When debts are paid on time, it will be easy for banks and lenders to give loan and borrow money after saw a good financial plan in paying debt. For all the businesses, it help them in making maximum returns and profits by managing and concerning more about finance matter. In addition, the biggest impact to society after knowing and learning on how to manage their own finance is the will thank Allah for all the wealth the He gave and know how to distribute some of the wealth toward needy people. Most of the Muslims must paying al-zakat by separating an amount of money from the wealth to the person than are in need[9].Others impact are it makes people to be more responsible toward their own money, honesty and fairness in dealing with customers and workers.
An excellent and professional financial manager must know how to control their own attribute in front of people that they are dealing with. There are many attribute and attitude that one must have to promote them and increase the trustee level from others. Financial managers must be economical and competent person. The idea of ethics and moderation in financial management are crucial and vital for the rights of investors and savers. Firstly, precise in equal information. Financial manager should not differentiate each people into each category, even the investor just invest a small amount of capital we still have to treat them with respect. Moreover, to gain all their trust toward us or to be most trusted worker, we must first gave an equality information toward others. As Allah has said human being act a trustee to manage resources effectively. Secondly, flexible from inclination. The right of financial manager which they should protect themself from the immature self-control. As a professional manager, one should avoid from misinterpretation information and inaccuracy in preparing people‘s account. Thirdly, freedom form coercion. This freedom implies that investors have the right not to be concerned into a transaction. Lastly, right to equal bargaining power that entitles all investor equal power in negotiations leading to a transaction.[10]
In Islam, there are some ethics that we have to follow in the obedience toward Allah S.W.T. Governing the rights and obligations of participants in a financial system. Firstly, it is carefree to contract which no contract is valid and basic freedom to enter into transactions. Secondly, freedom from al- riba’ and al-gharar which al- riba’ here mean a reward that one received after a work done for someone and something al gharar means avoid vague and dubious transaction and excessive uncertainty, for instance a seller cannot sell their fruits that are still in the tree.
Financial Manager is the management of business funds.[1] Financial manager is one of the board directors in a company which is a top manager. A top manager is an upper-level executive who guide and controls an organization’s overall amount of money. In one production, financial manager may act as a vice president as a chief financial officer. There are two categories who work under this section which are treasurer and controller. Moreover, under treasurer management, there were capital budgeting, cash management, commercial banking and investment banking relationships, credit management, dividend disbursement, financial analysis and planning, investor relations, pension management, insurance risk management and tax analysis and planning. While under controller management, there were cost accounting, cost management, data processing, general ledger (payroll, accounts receivable or payable), government reporting and internal control, and preparing financial statement.[2] A financial manager is responsible for providing financial advice and support to clients and colleagues to enable them to make sound business decisions. Specific work environments vary considerably and include both public and private sector organizations, such as multinational corporations, retailers, financial institutions, charities, manufacturing companies, universities and general businesses. Financial managers may also be known as financial analysts or business analysts. A financial manager also concerned the most with their finances. They study its debts and receivables, future capitalization needs, financial statements and other accounting information.
Being a financial manager is not an easy work. There are many requirements that a person need to qualify and verify to get this work and be promoted. The minimal qualification is having relevant postgraduate certificate but usually it need a further study for professional qualifications to get promoted from the boss. Some of the qualifications that a person need to have to get this excellent communication skills to deals with external and internal factors like lenders and suppliers, other managers and workers, investors and stockholder and government; an analytical approach to work in identifying problems correctly, generate reasonable alternatives, and select the best alternative to solve the problems[3]; problem-solving skills and initiative like what people had been through, the more knowledge you have and gained, the more rational and patience for you to handle a situation and problematic situations; strong attention to detail and an investigative nature; the ability to balance the demands of work with study commitments; good time management skills and the ability to prioritize; the ability to work as part of a team and to build strong working relationships; the ability to make quick but rational decisions; the potential to lead and motivate others; good IT skills in using computer and software.
Every financial manager must have their own personally task that have to perform to promote themselves. The roles of financial managers vary significantly. The generic nature of the job title can be misleading as the level and scope of the responsibilities involved in any role can differ enormously. In larger companies for instance, the role is more concerned with strategic analysis, which is the process of conducting research on the business environment within which n organization operates and on the organization itself, in order to formulate strategy whereas in smaller organizations, a financial manager may be responsible for the collection and preparation of accounts such as account receivable, account payable, income statement, balance sheet and various types of account[4]. In general, tasks across roles may include providing and interpreting financial information; monitoring and interpreting cash flows and predicting future trends to know the capability of that company to pay its own debts; analyzing change and advising accordingly; formulating strategic and long-term business plans to maintain business growth; researching and reporting on factors influencing business performance; analyzing competitors and market trends; developing financial management mechanisms that minimize financial risk; conducting reviews and evaluations for cost-reduction opportunities; managing a company's financial accounting, monitoring and reporting systems; liaising with auditors to ensure annual monitoring is carried out; developing external relationships with appropriate contacts, e.g. auditors, solicitors; producing accurate financial reports to specific deadlines; managing budgets; arranging new sources of finance for a company's debt facilities; and supervising staff.
In addition, a financial manager should always make an efficient financial decision to maximize all people’s satisfactions. In the words of Ezra Solomon, the basic rationale for the objective of wealth maximization reflects the most efficient use of society’s economic resources and this leads to a maximization of society’s economic wealth. There are two major objectives of finance management which is profit maximization and wealth maximization. First and foremost, profit maximization is a perfect competition between businesses. One, it is hand in hand with risks means that the more profitable the business, the riskier a business can be. Second, must ignore the timing of profit to be received[5]. Third, Financial manager should always connect with lenders and customers and keep dealing with stockholder and investor to promote and ask them to invest more capital to the company which ensure the supply of future capital for innovation[6]. While the other objective is wealth maximization which maximizing the net present value of any course of action and the firms. Net present value is different with net cash flows. Following are the various elements of wealth maximization, which future expected in cash inflows rather than cash money others increase in profits. Furthermore, takes care of risk factors associated with the project as the discount rate used for calculating present value. Others maximize owner’s economic welfare and judicious choice of funds value. Planning new strategies with the other managers in reducing cost and expenses and minimized risk.
Finance is the circulatory system of the economic body of a firm. The importance of a financial management is to maximizing shareholder’s wealth[7]. Following are the various importance of financial management to a firm. Firstly, financial management is a management of money matters. Financial management is very vital for both individual and organization. It deals with managing the funds and guides a company and individual to make optimum use of money to achieve the maximum returns which is highest profits. Furthermore, it helps individuals and firms to manage debt through debt management. It also helps in planning for retired person and the one who want to join and invest a total amount of money in an organization. Financial managers must always study and update with the balance sheet in order to ensure that all transactions are not even close to loss and bankrupt. Financial managers use and adapt different types of accounting tools to manage and control the finance like ratio. Many types of ratio is being use, for instance profitability ratio, short-term financial ratio and activity ratio. Profitability ratio is to indicate the firm is profitable by net income taxes with returns on sale, return on Owner’s equity and earning per share. Short-term financial ratio is to evaluate a firm’s ability to pay its debt which is current liabilities like working capital, current ratio and acid- test ratio. While, two activity ratios allow managers to measure how many times each year a company collects account receivables and sell its inventory[8].
Society in here can be clarifying as the individuals and organizations itself. The impact of hiring a financial manager to manage all finances in the company are it can help one to save more in capital and resources like a company can produce one important resources instead of buying that resources with higher price and thus can invest more by preparing a good proposal to send to all investor and shareholders. When a financial manager get an idea for a new strategy on how to reduce expenses. Indeed, it will result for all people to save more. It is also help others on spend less and earn more; this will lead to more savings and thus create a secure future. Then, the impact also help people by guiding them to create a financial plan whereby all the debts are paid on time. When debts are paid on time, it will be easy for banks and lenders to give loan and borrow money after saw a good financial plan in paying debt. For all the businesses, it help them in making maximum returns and profits by managing and concerning more about finance matter. In addition, the biggest impact to society after knowing and learning on how to manage their own finance is the will thank Allah for all the wealth the He gave and know how to distribute some of the wealth toward needy people. Most of the Muslims must paying al-zakat by separating an amount of money from the wealth to the person than are in need[9].Others impact are it makes people to be more responsible toward their own money, honesty and fairness in dealing with customers and workers.
An excellent and professional financial manager must know how to control their own attribute in front of people that they are dealing with. There are many attribute and attitude that one must have to promote them and increase the trustee level from others. Financial managers must be economical and competent person. The idea of ethics and moderation in financial management are crucial and vital for the rights of investors and savers. Firstly, precise in equal information. Financial manager should not differentiate each people into each category, even the investor just invest a small amount of capital we still have to treat them with respect. Moreover, to gain all their trust toward us or to be most trusted worker, we must first gave an equality information toward others. As Allah has said human being act a trustee to manage resources effectively. Secondly, flexible from inclination. The right of financial manager which they should protect themself from the immature self-control. As a professional manager, one should avoid from misinterpretation information and inaccuracy in preparing people‘s account. Thirdly, freedom form coercion. This freedom implies that investors have the right not to be concerned into a transaction. Lastly, right to equal bargaining power that entitles all investor equal power in negotiations leading to a transaction.[10]
In Islam, there are some ethics that we have to follow in the obedience toward Allah S.W.T. Governing the rights and obligations of participants in a financial system. Firstly, it is carefree to contract which no contract is valid and basic freedom to enter into transactions. Secondly, freedom from al- riba’ and al-gharar which al- riba’ here mean a reward that one received after a work done for someone and something al gharar means avoid vague and dubious transaction and excessive uncertainty, for instance a seller cannot sell their fruits that are still in the tree.
Thirdly,
freedom form Al- Qimar (Gambling) and Al-Maysir (Unearned Income).Stake an
amount of money is such an illegal game to produce a large amount of money is
haram and forbidden in Islam. Freedom from price control and manipulation.in a
mixed country like Malaysia, government put a price control for certain goods
to help consumers. In contrast, Islamic country like Arab and Pakistan did not
put price control and regulators cannot interfere in this situation. For
muslims, all goods and things in this universe are Allah’s. All muslims act as
the caliph in this universe and cannot manipulate the price of the products.
Lastly, entitlements to equal, adequate and accurate information attach good
information to the markets. Muslimin and muslimat cannot release false and
inaccurate information to other because it is forbidden and different way in
what Allah had taught muslim.[12]
Ezra
Solomon and Pringle John J. once said that financial management is concerned
with the efficient use of an important economic resource, namely capital funds.
Capital funds is the most needed resources for all company to increase and
build up their profits .Capital Funds can be use to buy fixed assets, products
and pay expenses that are occur in a company. While, Howard and Upton said
financial management involves the application of general management principles
to a particular financial operation. Next, Phillipatos G.C said that financial
management is concerned with the managerial decisions that result in the
acquisition and financing of short-term and long-term credits for the firm. In
addition, Westorn and Bringham said that financial management is an area of
financial decision making, harmonizing individual motives and enterprise goals[13].
Individual and enterprise both have generally same motive and goal which is to
maximize the profit retention in their own business.
Quranic recitations about financial
management
O you who have believed, do not consume one another's
wealth unjustly but only [in lawful] business by mutual consent. And do not
kill yourselves [or one another]. Indeed, Allah is to you ever Merciful.[14]
Those who consume interest cannot stand [on the Day of
Resurrection] except as one stands who is being beaten by Satan into insanity.
That is because they say, "Trade is [just] like interest." But Allah
has permitted trade and has forbidden interest. So whoever has received an
admonition from his Lord and desists may have what is past, and his affair
rests with Allah . But whoever returns to [dealing in interest or usury] -
those are the companions of the Fire; they will abide eternally therein.[15]
[2]Eugene F. Bringham and Joel F. Houston – Fundamentals of Financial Management Concise – South-Western learning – 5 - 2012,2009 South-Western
[3] Pride, Hughes and Kapoor - Introduction to Business – South-Western Cengage Learning – 243 – 2012,2010 South-Western, Cengage Learning
[4] Pride, Hughes and Kapoor - Introduction to Business – South-Western Cengage Learning – 169 – 2012,2010 South-Western, Cengage Learning
[5] Dr. Sonia Agarwal and Prof N.P Agarwal – Financial Management – RBSA Publisher – 9 until 12 – 2009.
[6] Karunakar Patra and J.K. Panda – Accounting and Finance for Managers – Sarup and Sons – 9 – 2006.[7] Karunakar Patra and J.K. Panda – Accounting and Finance for Managers – Sarup and Sons – 10 – 2006.
[8] Pride, Hughes and Kapoor - Introduction to Business – South-Western Cengage Learning – 220 until 223 – 2012,2010 South-Western, Cengage Learning[9] Ustadh Muhadir bin haji Joll and Kazzman bin Kamaruzzaman – Comprehensive Notes for Understanding Islam (FIM 1113) – 35 .
[10] Mohammed Obaidullah –Introduction to Islamic Finance – IBF NET (P) LIMITED India – 8 until 10 – 2008
[11] Surah Al-Mu’minun: 23:8. See Sahih International, the Holy Quran: Text and Translation
[12] Mohammed Obaidullah –Introduction to Islamic Finance – IBF NET (P) LIMITED India – 10 until 12 - 2008
[13] Dr. Sonia Agarwal and Prof N.P Agarwal – Financial Management – RBSA Publisher – 9 until 12 – 2009.
[14] Surah An-Nisa’: 4:29: See Sahih International, the Holy Quran: Text and Translation
[15] Surah Al-Baqarah :2:275 : See Sahih International, the Holy Quran: Text and Translation
[4] Pride, Hughes and Kapoor - Introduction to Business – South-Western Cengage Learning – 169 – 2012,2010 South-Western, Cengage Learning
[5] Dr. Sonia Agarwal and Prof N.P Agarwal – Financial Management – RBSA Publisher – 9 until 12 – 2009.
[6] Karunakar Patra and J.K. Panda – Accounting and Finance for Managers – Sarup and Sons – 9 – 2006.[7] Karunakar Patra and J.K. Panda – Accounting and Finance for Managers – Sarup and Sons – 10 – 2006.
[8] Pride, Hughes and Kapoor - Introduction to Business – South-Western Cengage Learning – 220 until 223 – 2012,2010 South-Western, Cengage Learning[9] Ustadh Muhadir bin haji Joll and Kazzman bin Kamaruzzaman – Comprehensive Notes for Understanding Islam (FIM 1113) – 35 .
[10] Mohammed Obaidullah –Introduction to Islamic Finance – IBF NET (P) LIMITED India – 8 until 10 – 2008
[11] Surah Al-Mu’minun: 23:8. See Sahih International, the Holy Quran: Text and Translation
[12] Mohammed Obaidullah –Introduction to Islamic Finance – IBF NET (P) LIMITED India – 10 until 12 - 2008
[13] Dr. Sonia Agarwal and Prof N.P Agarwal – Financial Management – RBSA Publisher – 9 until 12 – 2009.
[14] Surah An-Nisa’: 4:29: See Sahih International, the Holy Quran: Text and Translation
[15] Surah Al-Baqarah :2:275 : See Sahih International, the Holy Quran: Text and Translation
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