Ensuring the efficient operation of a company often means making sure that the different departments work together seamlessly.
There is no doubt that one of the most important departments in a company is the finance department. Covering a wide range of roles and responsibilities, from basic bookkeeping, to providing information, all the way to assisting managers in the execution of strategic decisions, the finance department plays a vital role in the efficient functioning of a company.
At a basic level, a finance department is responsible for all the day-to-day transactional accounting for the business.
Other finance department responsibilities include:
Tracking of all transactions
Various individuals within the finance department are tasked with tracking all transactions and following up on any payments that must be made.
Preparation of financial statements
Every company is required by law, to have financial statements prepared. This can be done by an external consultant or internally within the company financial department.
Management of the organisation’s cash flow
Cash flow management ensures that the lifeline of the company – the cash flow – is maintained efficiently. The finance department is tasked with ensuring that the company has enough money. Ensuring that there are enough funds available to meet day-to-day payments is vital to effective business-functioning.
Handling credit and collections policies for the company’s customers
The finance department is required to make the necessary follow-ups regarding collections.
Enforcing payment policies for the company’s suppliers
One of the most important finance department responsibilities is making sure that company suppliers are paid on time, to avoid any lapses in production or the provision of services.
Forecasting of cash flow needs
The finance department should be able to forecast industry trends, making it easier for strategic-level management to make better long-term decisions. Measuring and reporting regularly on key numbers is crucial to the success of the organisation.