The Finance Department

Learning Intention•Understand the role of the Finance Department

The Finance Department

• The main role of the Finance department is to provide information which details the organisation’s financial performance.

• Other tasks performed by the finance department are:• Prepares Annual Financial Accounts: Trading, Profit & Loss

account; Balance Sheet.

• Prepares cash budgets to predict future income and expenditure.

• Calculates wages and prepares payslips.

• Payment to suppliers.

• Completes tax returns.

The Finance Department

• It is important for managers to keep a close eye on the organisation’s financial performance to:– measure its success.– assess whether or not debts

can be met.– analyse what lies ahead in the

future: is it possible to expand?

3 main tasks of finance dept

• Payment of wages and salaries• Payment of accounts (bills)• Maintenance of financial records and

accounts

The tasks can overlap and a large part of the finance department’s work is monitoring money in and money out, and giving advice to other departments on how much money is available

Overall the tasks of the Finance dept show how the business is doing by recording:

• How it has spent its money

• The income it has received from sales

• The value of its assets (ie equipment, buildings etc)

Most organisations will use an accountant to provide answers to the following questions

• How is the company performing?

• Have we done better than last year?

• How much tax will we pay?

• Can we afford to expand or buy new equipment?