The finance depart is a significant part of a company. It is responsible for acquiring funds for the firm, planning for the expenditure of money on various assets and managing resources within the organization. It ensures efficient financial management and control which are necessary to support all the activities done by a business.
The department has a broad range of roles and responsibilities. A business must have a good financial unit for it to run smoothly. The performance and success of a firm greatly depend on how well the finance department functions. The Finance department does a wide range of activities like bookkeeping, providing information to managers, transactional accounting, cash flow, payments, etc.
Some of the key roles include:
Money Out and Money In:
The finance unit is responsible for making all the payments for the company. They have to make sure that bills are being regularly paid and process all the incoming payment. To maintain a good relationship with the clients and vendors, it is always advisable to pay on time. Accounting department needs to keep an eye on the expenditures made and make it a point to save money. When the payments are made on time, there is no need to pay a late fee or a payment charge. The company does not have to execute unnecessary expenses if the finance department makes all the payments at the right time.
Tracking the invoices, receivables and any other collection actions must be done carefully. The employees need to check if the customers pay the invoices on time, if they delay it then, a reminder must be politely sent to the customers.
Since the department deals with money, the employees need to be very careful and keep in making sure that all the errors are avoided, and the business is free from any frauds and theft.
Processing the salary payments are one of the primary roles of a finance department. They need to make sure that everyone gets paid. Employees of the company need to be paid on time, and they also need to check if taxes are correctly accessed, and tax payments are made on time for both state and federal agencies.
The employees of the team also work on the preparation of financial reports like balance sheets, P&L, and budgets. One of the main reasons to collect all the data is to properly generate a report which can be used for budgeting and make other decisions. These statements are also required for establishing communications with the investors, banks, and other employees who are involved in developing your business.
Management of Taxes:
The finance department has to handle the taxes of a company. To maintain an excellent corporate relationship with the government, the firm needs to pay taxes as you earn to the relevant authorities and also make sure that implementation of tax matters are done within the framed policies