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A finance department manages the financial operations of a business and provides information and advice to the rest of the business. All areas of a business will have some contact with the finance department. You should understand how a typical finance department operates, and who does what in it.

The four key responsibilities of a finance department are:

 Ensuring that a business has sufficient money

 Recording and controlling transactions within a business

 Providing information internally to managers to help with planning, decision-making and control

 Reporting information externally to stakeholders such as shareholders and tax authorities

 The finance director. The finance department is usually headed up by a finance director (FD) or chief financial officer (CFO) who, as a board member, is responsible for ‘financing and investment strategy’ and making sure it supports the ‘business strategy’.

“My money goes to my agent, then to my accountant and from him to the tax man” Glenda Jackson, English actress

The FD also runs the finance department, which may include the following roles, depending upon the size and complexity of the business:

 The financial controller. This person has responsibility for recording, analysing and summarizing financial transactions. In particular the financial controller will produce the financial statements. The financial controller may manage a number of accounting staff who look after areas such as sales invoicing; debt collection; purchases; making payments; payroll; fixed assets; and taxation.

 The management accountant. He or she assists management with planning, decision making and control. The management accountant will prepare both regular and ad-hoc reports. These reports will include ‘key performance indicators’ (KPIs) which measure the performance of individuals, departments and other critical areas of the business. In particular the management accountant will manage the budgeting process.

 The treasurer. Found in larger businesses, the treasurer has responsibility for financing the business and implementing the financing and investment strategy. In particular the treasurer will liaise with banks, manage cash flow and deal with foreign currency exchange.

The finance department is a key function which should contribute to the success of the business.