What Are The Importance Of Finance Department In An Organisation?


2 Answers

Nathaniel Hobby Profile
Nathaniel Hobby answered
The role of a finance department in any type of organisation is to ensure that adequate funds are for the resources that are required to help achieve the organisational objectives. The department also ensures that the costs are controlled, that there is an adequate cash flow, and also that it establishes and further controls all profitable levels. All of which are extremely important to the running of any organisation.

One of the major roles of the finance department is to identify appropriate financial information prior to communicating this information to managers and decision-makers, so that they can make informed judgements and decisions that will benefit the company or organisation. The finance department, further prepares financial documents and final accounts for managers to use and for reporting purposes (in an AGM, for example).

Duties of the finance department include: Maintaining financial records, the payment of bills and expenses, the collection of accounts that are due, the general monitoring of funds and the payment of wages and salaries. Yet, it can be argued that the main duty of the finance department is to provide information to the managers and decision makers within the business.

Therefore, it can be considered that the finance department are the backbone of any organisation. Without any form of financial control, the company would be unable to control the inward and outward flow of cash and in terms of utilising the cash, without the finance department, there would be very little knowledge or direction as to where the company can invest and how much they can invest in.

Answer Question