Your Finance and You
Finance
can be simply defined as some things that deal with money time and risk in a
single platform. This being the case, there are different platforms of finance
that can be found in an organization. These platforms will also vary according
to the needs of the organization and its requirements. Most of finance is
divided into personal, business, corporate and public finance. These platforms
of finance have different characteristics. However, they are based on more or
less the same principals. The overview of finance is simple and it can be
understood by an average individual.
Finance
is basically an aspect of business management. This means that an organization
or an individual will have to know how finance works in order for them to
understand its impact in their life. It is mainly associated with the
acquisition and the use of funds of a business entity or an individual. In
finance, there is the income that is generated and the expenditure. Income is
the amount of money that has been gotten in total. This can be through payments
for goods and services. The expenditure is the amount of money that has been
used to generate the income. It can come in terms of costs of buying goods,
expenses while providing a service or use for any other business that was
related to the generation of income.
Finance
management is the act of making sure that the income is higher than the
expenditure. When the income is higher than the expenditure, it means that the
entity is making a profit. This is in turn means that the entity is able to run
comfortably on its own. An entity that is running on its own has good financial
management and smooth running of other branches of business. However, when the
income is lower than the expenditure, there is poor management of finance and
the business in general. Entities that make losses are those that experience
this situation. To avoid it, the entity will have to know why there are
expenses which are exceeding the income.
Finding
out where the problem lies should not be a difficult task. In most cases, the
problem is a result of spending too much money on the expenses. The costs of
running the entity should be reviewed and adjusted. If this does not work, then
the products being offered should have an adjustment on price. When these two
things are implemented, the entity will start recovering and making profits.
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