Business finance is also concerned with setting up the necessary
Business finance is often referred to as the science of funds management, which is used to describe the process by which financial assets are acquired, used, allocated, stored, as well as released for various purposes. The various uses of business finance are as described in business plan. Thus, the first thing that a business owner has to do before starting a business is to write down his business plans in order to determine the purpose of opening the business as well as the resources needed in order to make it successful. After this, he should gather all the resources and start looking for investors, if there are any, or he should apply for a business loan if there is not.
Business finance is also concerned with setting up the necessary mechanisms for cash flow and control, including purchasing and selling of raw materials, working capital, investment and financial management. This includes budgeting of resources, analyzing the effects of prices and promotions, price control, distribution of raw materials, cost accounting, invoicing, and payment terms to customers. Also included in the areas of business finance are management of financial assets, capital budgeting, working capital management, financial management, information systems, tax accounting, financial consulting, purchasing of supplies, accounts payable, purchasing inventory, and customer invoice management.
Besides these, business finance considers the factors that will determine the value of your assets, liabilities, profits, taxes, and cash flow. Since cash flow is a very important concept in business financing, this is usually included in the procedures for determining the worth of a company. Some of the concepts that are related to this concept include the theory of viability, time value, potentiality, and credit risk. In short, business financing involves all the concepts that deal with the supply and demand of loans and capital.