The role and Importance of Finance The Importance

The role and Importance of Finance

The Importance of the Finance Department To calculate and pay salary and wages To prepare financial information(budget) for decision-making To monitor and control internal finances and expenses The role of Finance To prepare the organisation’s final accounts To maintain accurate financial records To pay accounts due and bills received To analyse financial information

The role of the Finance Department The financial function is important because it has to: • To ensure that there adequate funds available to acquire the resources needed to help the organisation achieve its objectives; • To enable costs and expenditure to be controlled • To ensure costs are controlled; • To ensure adequate cash flow; • To forecast what might happen in the future • To monitor the organisation ‘s performance; • To establish and control profitability levels. • To provide management with information for decision making

The Activities Performed Key financial Activities that assist management in decisionmaking will be developed. These are: • cash flow; • financial statements and reporting; • financial analysis (i. e. ratio analysis); • budgetary control.

Activity 1 Identify 3 activities carried out by the Finance Department

Activity 2 Suggest a reason why it is important that bills are paid on time

Activity 3 Identify the financial statement that can be prepared to forecast the organisation’s future cash flow position.

Activity 4 Prepare a dictionary with all the meaning of the accountancy terms that will be discussed throughout the study of this topic See the data base set up on ilearn for this purpose http: //www. bized. co. uk/learn/business/accou nting/busaccounts/notes/index. htm