Question

Briefly explain the functions of the finance manager with regard to disposal of surplus and management of cash.

Answer 1

Following are the functions of a finance manager that are concerned with disposal of surplus and management of cash.

1) Allocating surplus funds available to reserves and dividends - Finance manager decides the proportion of surplus funds available to the company to be transferred in reserves to meet future needs and the proportion of funds to be transferred to shareholders as dividend.

2) Provision for future needs- Finance manager ensures that sufficient funds are available for future needs of the company by managing the financial transactions of the company.

3) Provision of stable dividend- Finance manager makes provision of funds to be transferred to shareholders of the company. He ensures that shareholders get a stable rate of dividend.

4) Managing inflows and outflows of cash- Finance manager takes a record of the cash flows of the company.