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Understanding the Role of Finance and Accounts

Finance and accounts are a broad subject concerned with the study, preparation and reporting of all financial transactions related to an enterprise. This includes the preparation of periodic financial reports for dissemination to the various stakeholders. There are three distinct areas of focus within the discipline of accounting. They are CPA (certified public accountant), who specialize in the practice of making financial reports and complying with accounting requirements; LVP (financial writer/vp), who prepare financial reports for the CPA as well as managing the accounting process and data bases; and CFA (I Financial Analyst), who analyze the data and information provided by the other two areas to provide a comprehensive overview to management regarding the status of the company’s finances.

 

Within the scope of finance and accounts aat level 2, there are three main areas of concentration: budgeting, financing, and sales and profit and loss control. The first area focuses on the planning and preparation of the organization’s budget. Finance and accounts then come into play as the planner makes all the financial projections, which take into account such things as future financial needs and external factors such as inflation. For the planning of the budget, the analyst synthesizes all the relevant information, both external and internal, and makes a workable plan that is effective and meets the requirements of the company.

 

Financing, on the other hand, is concerned with the process of getting money from the investors to fund the operations and projects of the organization. Finance and accounts analyze the financial records of the organization and the suppliers, borrowers and customers of the organization, to determine the best sources of funding. These include the sources of loans, grants and other credit from banks and other financial institutions as well as other external sources. Finance and accounts also take care of the preparation and approval of the annual budget. The budget is prepared as per the requirement and presented to the management for approval aat level 3.

 

The third area of focus in finance and accounts is the collection and processing of data related to the financial transactions. This includes the preparation and the submission of the audited accounts and the preparation of the annual financial report, which is also known as the operating statement. The entire process of managing the finance and accounts is carried out by the finance department, which employs a large number of people, including accountants, finance analysts, finance managers, auditors and administrative personnel.

 

The other major responsibility of the Finance and Accounts department is the preparation and approval of the management budget. The budget is prepared as per the requirement of the company and presented to the management for approval. Management reviews the budget periodically, mostly at the annual meeting of the management and is often required to justify the budget proposals before the management. Finance and accounts prepare the budget as per the instructions of the management and keep a record of all the financial transactions that have been made during the year.

 

Finance and accounts perform many other functions besides these three. Apart from performing the financial analysis, preparing the annual financial reports, preparing the balance sheet and analyzing the efficiency of the company’s financial resources, they also perform the function of developing plans for budget implementation and reviewing the performance of the company annually. They develop and implement policies for attaining the long-term viability of the organization. Finance and accounts also play an important role in providing information to the regulatory authorities, such as the Securities and Exchange Commission (SEC), relating to the conduct of the business of the company. They also prepare financial statements in respect of the year ending date and report quarterly financial reports to the corporation.