Financial administration is a vital part of business because it is concerned with an organization’s resources. A financial administrator is responsible for managing the accounts receivables and payables of the organization. He also develops the organization’s budget, prepares financial reports and is involved in directing its investment activities. The administrator is also responsible for planning the organization’s long-term financial goals and protecting assets.
It is the responsibility of an administrator to prepare the organization’s monthly financial reports. The administrator usually maintains spreadsheets of all the financial activities of the organization and compiles them into the report at the end of the month. The report details the inflows and outflows of cash in the organization, which helps in establishing accountability in the business. The financial administrator also keeps all the documentation that supports the figures contained in the report, such as invoices and receipts, for auditing purposes.
The financial administrator manages the cash controls in the organization ensuring that money is properly applied to the business goals. The administrator is in charge of collecting money relating to the accounts receivables of the organization, such as debtors’ payments and rental income. He also pays the organization’s liabilities such as insurance premiums, social security payments and other accounts payables. The financial administrator approves procurement requests and cash disbursements and reflects all the company transactions in a cash flow statement that he regularly reconciles to keep track of the money.
One of the main responsibilities of a financial administrator is to draw up the organization’s monthly budget based on the requirements of the business. Since the administrator manages the company’s cash and is privy to its usage, he is best placed to prepare the monthly budget. In performing this duty, the administrator liaises with the heads of other departments to find out if they have any supplementary needs so that he can make realistic cash flow projections. After preparing the budget, the administrator allocates to each department the cash it requires.
A financial administrator also offers investment support either by providing relevant information on the company’s finances or by developing and maintaining an investment portfolio. The administrator handles the financial resources of the organization, so he can offer valuable contributions on the liquidity, debts and financial projections of the company, which assist in making investment decisions. Alternatively, the financial administrator could be empowered to invest excess cash, but he must adhere to company rules and policies. Furthermore, he must make full disclosure of the ways in which he has applied the money.
- Thomas Northcut/Lifesize/Getty Images