Coordinator Tatyana Andreeva: Fine. You are welcome!

Lena Youmashina: Hello! I’d like to tell you about of elements of financial management. Financial Management can be referred to as a branch of finance dealing with the managerial significance of the finance techniques. It involves planning, organizing, directing, and controlling the financial activities of a business firm, like procurement and utilization of the funds of the business firm.

The key elements of financial management include:

· financial planning;

· financial control;

· financial decision-making.

Let me put you in the picture of it. Speaking about a Financial Planning it is a process of setting objectives, assessing assets and resources, estimating future financial needs, and making plans to achieve monetary goals. Financial planning, as an important element of financial management, ensures that adequate finances are available at the requisite time to meet the needs of a business.

Altynai Tashenova: Excuse me, can I ask, what needs of business Finance usually cover?

Lena Youmashina: Oh, Let me clarify some facts. These needs include short-term requirements like investing in equipment & stocks, employees’ payments, and fund sales made on credit.

Altynai Tashenova: Thank you.

Lena Youmashina: These needs include short-term requirements like investing in equipment & stocks, employees’ payments, and fund sales made on credit. The long-term needs, on the other hand, include need for finance might arise for making significant additions to the business’ productive capacity.

As for Financial Control, it is other important element of financial planning, aims at ensuring that the business is meeting its goals. Financial control is about maintaining robust, scalable financial systems and processes in every area of your business.

I can’t help saying that financial control refers to facts that show whether or not the business has the right to control the economic aspects of the worker’s job.

The financial control factors fall into the categories of:

· significant investment;

· unreimbursed expenses;

· opportunity for profit or loss;

· services available to the market;

· method of payment.

Let me put you in the picture of it.

Significant investment.

An independent contractor often has a significant investment in the equipment he or she uses in working for someone else. Furthermore, a significant investment is not necessary for independent contractor status as some types of work simply do not require large expenditures.

Unreimbursed expenses.

Independent contractors are more likely to have unreimbursed expenses than are employees. However, employees may also incur unreimbursed expenses in connection with the services that they perform for their business.

Opportunity for profit or loss.

The opportunity to make a profit or loss is another important factor. If a worker has a significant investment in the tools and equipment used and if the worker has unreimbursed expenses, the worker has a greater opportunity to lose money. Having the possibility of incurring a loss indicates that the worker is an independent contractor.

Services available to the market.

An independent contractor is generally free to seek out business opportunities. Independent contractors often advertise, maintain a visible business location, and are available to work in the relevant market.

Method of payment.

An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time. An independent contractor is usually paid by a flat fee for the job.

Altynai Tashenova: Speaking about financial decision-making, some words should be said about decisions. All of us have to make decisions every day. Some decisions are relatively straightforward and simple.

Others are quite complex.

Simple decisions usually need a simple decision-making process. But difficult decisions typically involve issues like these:

· Uncertainty - Many facts may not be known.

· Complexity - You have to consider many interrelated factors.

· High-risk consequences - The impact of the decision may be significant.

· Alternatives - Each has its own set of uncertainties and consequences.

· Interpersonal issues - It can be difficult to predict how other people will react.

A Systematic Approach to Decision Making.

A logical and systematic decision-making process helps you address the critical elements that result in a good decision. By taking an organized approach, you're less likely to miss important factors, and you can build on the approach to make your decisions better and better.

Lena Youmashina:Excuse me, can you tell me, what is an organized approach?

Thank you.

Altynai Tashenova:

There are six steps to making an effective decision:

· Create a constructive environment.

· Generate good alternatives.

· Explore these alternatives.

· Choose the best alternative.

· Check your decision.

· Communicate your decision, and take action.

Here are the steps in detail: