What is the relationship between production department and finance department?

The relationship is integral. The production department is involved and concerned with the making of the product or the development of the service. It is the heart of businesses as they need to provide something that the consumer wants, and in product firms, the production department deals with the making and development of a product to make the consumer want it, or feel that they need it in their life.

The finance department deals with all kinds of monetary transfer that the business is involved with, and of course the production department is one of the biggest areas of loss. The production department needs to go about creating the product and in near enough every business, there is a cost to creating the product or service. Hence, the finance department will deal with how much of the firm's funds or assets are being lost to this and will decide whether the efficiency of the business is sufficient.

The cost per unit will be monitored by the finance department and this is an incredibly important concept that overlaps between the two firms.

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There is a strong interaction between the finance and production departments. For all the production costs the production department has to contact with the finance department. The aim of organizations is to increase profitability and to reduce cost and therefore, production department has to design the products which can reduce the costs incurred by the company and improve the quality of the products. Hence, finance and production departments keep interacting with each other.