It is imperative that business owners and managers develop basic financial management skills. Expecting others in the organization to manage finances is clearly asking for trouble. Basic skills in financial management include critical areas such as cash management and bookkeeping, which should be done according to certain financial controls to ensure integrity of the numbers.

Business owners and managers should also learn how to generate financial statements (from bookkeeping journals) and analyze those statements to really understand the financial condition of the business. Financial analysis shows the "reality" of the situation of a business. For this reason, financial management is one of the most important practices in management.

Ratios analysis is a vital tool when assessing a company’s strength. Extracting and comparing data can offer additional insight and information. This form of comparison provides information that may not have been easily visible at first glance.

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