Introduction: The finance department of a company is responsible for all of the financial aspects of a company, The Finance Department really has two fairly dissimilar jobs to perform in most companies: managing the company’s financial resources (“Finance”) and recording and reporting all its financial transactions (“Accounting”).today’s mid-sized and smaller companies don’t establish separate Finance and Accounting departments within their organizations.
Role of the Finance Department
Accounting and Finance is the heart of a business. Its functioning efficiently directly affects the rise and fall of a business. It is possible to survive, for a while at least, without an effective marketing plan, poor human resource management and indeed a poorly designed business strategy finance is a very essential to smooth running of the business No finance – no business No business, whether big, medium or small can be started without an adequate amount of finance. Right from the very beginning, i.e. conceiving an idea to business, finance is needed to promote or establish the business, acquire fixed assets, make investigations such as market surveys, etc., develop product, keep men and machine at work, encourages management to make progress and create value These departments are crucial to the financial well-being of a company and ensure that there is money for day-to-day operations and oversee investments strategies for future growth.
Finance
As the economy continues to develop, so does the role of the finance occupation within an organization, motivated by investments in activity resource planning, shared services and changes in its reporting role, most finance functions are becoming more efficient requiring fewer resources to manage them and closely aligning with the company’s business structure. This is especially true in the area of operation processing where superior computerization of financial transactions has enabled finance staff to increased their role and spend more time supporting decision-making processes, slightly than just processing and merging transactions.
As business processes develop and business questions become more multifaceted, the analytics essential to answer and act on these questions entail a higher level of data addition and organizational teamwork. For in-stance, historically, finance departments were oftentimes the only departments with access to accurate information about a company’s financial results. However, this information was usually at an aggregated level and wasn’t available until several days, sometimes weeks, after the end of the month. More and more overall organizations are integrating and standardizing their business processes and systems, allowing end users with both finance and non-finance functions to update and obtain financial information from any geographic location. This has significantly improved decision support within the organization.
The finance department of a company is answerable for all of the financial aspects of a company to achieve these objectives, accounting, finance, tax and other financial areas are developing data warehouses collective with sophisticated analytics to serve the needs of the entire enterprise. We refer to this advanced decision support capability for finance as financial analytics. This article examines the evolution of financial analytics and its effect on the state of data warehousing. These departments are crucial to the financial well-being of a company and ensure that there is money for day-to-day operations and oversee investments strategies for future growth.
01. Cash Flows:
Managing an organization’s cash flows and reorganization its financial logistics is of paramount importance to managing liquidity risk and optimizing interest charges. There are various ways to streamline daily cash management, because an organization daily cash flow is the most vital duty of the finance division. Every day, businesses spend money on office supplies, equipment and salaries, so it is important to monitor each day cash flows. The finance department can make adjustments and recommendations on how to adjust these cash flows for better presentation.
A company wants to keep enough cash at hand and enough income from accounts receivable and cash sales, to cover these debts. a company’s cash flow statement, it is important to consider each of the various sections which contribute to the overall change in cash position. In many cases, a firm may have negative overall cash flow for a given quarter, Cash Flows from Financing Activities is a measure of the money that a company took in or paid out to finance its activities. It represents the flow of cash between a company and its owners and creditors. Typically included in this calculation are the issuances or repurchase of common stock, the issuance or repayment of debt and the dividends paid out to shareholders.
Chief financial officer (CFO), of finance department is major responsibility to control the cash flow position throughout the company, understand the sources and uses of cash, and maintain the reliability of funds, securities and other valuable documents. You receive, have custody of, and disburse the company’s excise and securities. CFO responsibility includes the influence to launch accounting policies and procedures for credit and collections, purchasing, payment of bills, and other financial obligations. Cash is king and the flow of cash, or cash flow, is the most important job a CFO has in any company. and if at all possible positioned to guidance on the selection of the most suitable electronic banking and treasury management system for organization.
02. Accounts Receivable and Payable:
The finance department also makes sure accounting and reporting. Cash and banking tricks and certain Accounts Receivable activities that client who are past due are contacted and their balances paid. A company must have adequate money coming in from its operations to cover expenses, so when credit is comprehensive, it must be paid in a appropriate manner. The finance department also makes sure that credit accounts are taken care of and paying all due bills to vendors and suppliers to cover the costs of raw material or purchased goods that were bought on credit is another area that the finance department should handle. The finance department can pay bills when they are due and make decisions on what and when to pay to exploit investment strategies.
03. Taxes:
Suitable to the current intricate tax structure across the world, finance department jobs are more in demand these days. Satisfying out tax forms and addressing deductions and tax strategies can often be performed by the finance department CFO who inspects the book of accounts and records and computes the taxes according to the laws and regulations. He also the advisors to the management/individuals concerning. The tax liability, updated tax arrangement and layering out strategic plans for minimizing tax liability. They are the ones who records, maintains and calculates the complete details of the individual/ organization’s assets and their income and then computes the tax liability on those assets and income. So finance departments concentrate for this field should have good knowledge of mathematics, accounts and tax laws. They should also acquire effective communication and organizational skills.
04. Investments:
Finance departments invest extra cash to make money on the interest. Although businesses should keep a small amount of cash on hand, it is wise to invest the available money to enlarge profits for shareholders’ or owners’ wealth. The finance department should be able to recommended short-term investment strategies for cash and instruct owners on long-term strategies.
The Finance department is responsible for managing the financial operations Functional responsibilities include accounting, financial reporting, cash management, budgeting, debt management and investments. The accounting function includes accounts receivable, accounts payable, fixed assets and general accounting. Finance departments invest extra cash to make money on the interest. Although businesses should keep a small amount of cash on hand, it is wise to invest the leftover money to increase profits for shareholders’ or owners’ wealth. The finance department should be able to recommended short-term investment strategies for cash and instruct owners on long-term strategies.
The responsibility for financial reporting includes preparing monthly interim financial statements as well as the Comprehensive Annual Financial Report in accordance with generally accepted accounting principles (GAAP).
accounting:
The accounting job is typically done by the Accounting Department; at its simplest level accounting is still about abridgment and adding up the financial values and transactions connected with a business or some other enterprise. However, accounting and the role of accountants has urbanized far beyond this simple idea. The modern accountant extracts sense from a firm’s financial data: partly to help control its behavior, partly to decide what resources are available for future development and partly to satisfy the needs of a wide range of different groups who need financial information for their own purposes.
But most important to running the companies are the reports the accountants prepare for company managers, for it is those reports that managers use to appreciate their company’s financial past and make decisions about its financial future.
Accounting within firms has developed in two principal instructions: first in fulfilling the information needs of external stakeholders and, second, in providing information to management to assist them in their decision-making and other activities. The externally oriented division of the subject is called ‘financial accounting’ where statements of financial concert over a period of time are twisted the income statement (formerly the profit and loss account), the balance sheet and the cash flow statement. ‘Management accounting’ is anxious with producing internal information for the management of the firm.
Conclusion: In today’s ever-changing business surroundings, financial executives are exploring ways in which the financial function can bring greater value to their organizations. To this end, they are transforming their organizations from focusing primarily on regulatory reporting to most effectively providing the information that internal management needs to more effectively “run” the business. financial executives must now think beyond the traditional financial information contained in general ledger systems and consider how best to provide for the inclusive measures and analytical methods needed to drive decisions during complex, dynamic companies.
