This article sheds some light on the importance of the finance department in industries along with the major responsibilities of the finance department.
Finance is a one of the critical departments in any company. It would not be wrong to say that it comprises the backbone of a company's operations and success. The major purpose of the finance department is to record, classify and summarize the financial record and make future predictions in order to develop the feasibility and practicality of any future endeavor of any project that a company plans to undertake. The job of the finance department is to ensure the smooth availability of financial and economic resources to the ongoing projects and functions, and compliance to the standards of regulatory authorities when it comes to industry practices and policies.
Purpose of Finance Department:
A finance department is responsible for recording all financial activities, detect any alterations in the financial environment, and forecast any changes in the financial and economic trends. These include and outlook of profit and projected and budgeted income and taxes to be paid. All organizations operating, in either the public or private sector, need a finance department to ensure that it is moving in the right direction in monetary terms and continues to view operating procedures. The basic function of the organization normally includes planning, accounting, financial analysis, taxation, investment and return on investment analysis. Many companies outsource this function to other professional company’s in order to save cost these days.
Responsibilities of Finance Department:
The finance department and its personnel ensure that the company policy is up to date and has all the necessary financial ingredients to make it successful in the long run. The department assists in developing strategic and organizational goals that will keep the wheel of a company running. The finance department inspects internal mechanism and policies to safeguard that they are in line with the industries and government regulations. Apart from the above finance department also assists the company in ensuring the filing of tax returns in time, and without any hindrance.
Financial Analysis to be carried out by the Finance Department:
The job of the finance department is to make comparative statements that detect any changes in the current performance of the company as compared to the historical data. Conducting this practice ensures the comparative performance and views whether there is a need to make any adjustment in the company’s current policies or not.
Financial departments accounting responsibilities:
The main task of the accounting personnel is to get a company through audit without any objection. This is important for the outlook of the company because if a company fails an audit it is mostly likely to be fined and will lose a lot in terms of market value. The job of the accounting department is to come up with complete and accurate financial statements for stockholders and the government.
Tax planning by the finance Department:
The other function of the finance department is to evaluate and file tax returns with the government. The tax specialist's job is to advise on tax returns, and develop tax saving strategies that not only save tax, but also allow companies to save itself against fines and other lawsuits from the government.
Finance Department and Risk Management:
Risk management is another key area of finance. Its function is to predict the right price for a product and detect the risks that come attached in a corporate world.
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