A financial strategy of an organization is concerned with the procurement and utilization of funds to ensure adequate and regular supply of funds fulfilling the present and future requirements of the business enterprise. Financial strategy deals with areas such as financial resources, analysis of cost structure, estimating profit potential, accounting functions and so on. In short, financial strategy deals with the availability of sources, usages, and management of funds. It focuses on the alignment of financial management with the corporate and business objectives of an organization to gain strategic advantage .
The components of a financial strategy include :
– Financial resources: The sources from which funds can be raised.
– Cost structure analysis: The analysis of costs incurred by the organization.
– Profit potential estimation: The estimation of profits that can be generated by the organization.
– Accounting functions: The functions related to accounting such as bookkeeping, auditing, etc.