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In an increasingly competitive and risk-sensitive global economy, effective financial management has become central to ensuring the stability, survival, and long-term success of both public and private institutions. Experts say financial governance is no longer a backend function but a critical driver of strategic planning, operational efficiency, and stakeholder confidence.

Finance professionals note that while innovation, skilled human resources, and technology remain vital for institutional development, a robust financial system acts as the backbone of day-to-day operations. Weakness in financial control often leads to project delays, resource misallocation, or even institutional collapse.

Finance Beyond Transactions: A Strategic Tool

Modern financial management goes far beyond traditional budgeting and accounting. It encompasses strategic decision-making in investment planning, risk mitigation, capital allocation, and sustainable growth.

Efficient budgeting ensures the optimal use of funds, while proper management of working capital allows institutions to reinvest surplus into productive ventures. Financial planning also plays a critical role in protecting institutions from external shocks, such as inflation, liquidity crises, and market volatility.

Experts emphasize the importance of integrating data-driven financial reporting into corporate governance. Timely and accurate financial data supports evidence-based decisions, improves transparency, and enhances investor confidence.

Private Sector Adoption Still Evolving

In Bangladesh, financial management practices within the private sector are improving, but many organizations still treat finance as a support function rather than a strategic priority. This often results in inefficient cost control, poor risk analysis, and misaligned business planning.

However, growing awareness of corporate governance, digital finance tools, and performance monitoring systems has led to progress. The adoption of ERP solutions, financial dashboards, and regular audit disclosures has helped improve transparency and operational efficiency in many firms.

Industry insiders suggest that training financial personnel and integrating automated tools can further professionalize financial planning, especially among emerging businesses and startups.

Public Institutions and Global Best Practices

The role of financial management in public institutions is equally critical. According to the World Bank, Public Financial Management (PFM) systems are essential for ensuring fiscal discipline, efficient resource allocation, and accountability in public spending.

Countries such as New Zealand, Canada, and Estonia have established strong PFM frameworks that allow near real-time budget execution, digital invoice approval, and data-driven policy formulation. Bangladesh has also made strides through platforms like iBAS++, IFMIS, and the PEFA framework, although implementation challenges and skill gaps remain.

Financial experts recommend that Bangladesh accelerate reforms and improve staff capacity to fully leverage the benefits of these systems.

Call for Strategic Financial Planning Across All Sectors

As institutions navigate an era of global uncertainty, financial management must be repositioned as a core strategic function. Analysts argue that sustainable development—whether in the public or private sector—depends on efficient fund utilization, risk-informed planning, and investor trust.

Key steps include:

• Strengthening financial reporting and compliance
• Enhancing the capacity of finance teams
• Adopting modern financial management systems
• Institutionalizing risk management policies
• Promoting financial literacy at all levels

In conclusion, finance is no longer just a ledger-based activity—it is the compass that guides institutional success, builds resilience, and ensures long-term value creation for all stakeholders.

writer: Ariful Islam Bhuiyan
Deputy Director, BEPZA
Analyst on International Trade and Financial Affairs