Definition of Local-International Finance

Finance studies all activities that have some relationship with capital flows and money and can refer to a person, a company, a city or a state. At the same time, financial activity focuses on money management, that is, how it is obtained and its uses, the payments and interests associated with money transactions, etc.

Local finance

Municipalities are organized from a budget

In this sense, budgeting means calculating in advance how much money will be entered into a municipality through of the taxes that are collected and, at the same time, how much money will come out to cover the expenses of salaries, electricity, Water, maintenance, works by infrastructure and the different municipal services.

In order for municipal finances to be adequately managed in an annual budget, it is necessary to take the reference of the fulfillment of the previous year's budget.

Thus, local finances are based on budgets, which present different stages: formulation, approval, execution, follow-up,

evaluation and liquidation. Like any state entity, a municipality must manage its finances in accordance with all regulations and procedures established by the law.

Municipal finances incorporate a series of specific areas: the accounting, the treasury and administration.

international finances

This area studies the money flows that take place between companies at the international level, especially in the field of globalized trade.

Today, finance in a globalized world has a whole series of tools provided by the Internet: the use of social networks, search engines, emails and many other multimedia elements that are shared on a daily basis.

The internationalization of finance is framed in a economy global, which means that the protectionist economic model of nations has been replaced by a model open to everyone. This openness offers a number of advantages for consumers, for companies and for nations. However, there are also a series of drawbacks, such as the contagion effect of a national economy in other territories.

International finance deals with the money management of companies. In this sense, this area focuses on capital flows, financing and possible investments.

Photos: Fotolia - grgroup / phloxii

Topics in Local-International Finance