The finance function is considered to be one of the most important functions of any business as it secures the implementation of other functions. Financial function is a set of aims, skills, procedures and systems, which is able to meet the challenge of optimal and efficient use of resources. Well-organized financial function is a reliable and at the same time flexible business foundation, which allows the company to respond immediately to dynamic market and business changes.
In the modern organization of the financial function it is needed to expand its contribution to the value of the business; the financial function has to provide quality information in proper time and to ensure the effectiveness of control mechanisms in the conditions of ever-changing demands of corporate management.
The finance function is aimed at financing of ongoing activities, evaluation and implementation of strategic investment, maintenance of current liquidity and solvency, profit maximization as well as at the rise in the cost of joint-stock (own) capital and in the value of the organization.
In accordance with it’s aims the finance function performs a set of tasks.
Among them the ensuring of economic activity of enterprise with financial resources (aims 1, 2), organization of interaction between financial-credit system and other business entities (aims 1, 2), effective usage of circulating capital (aims 2, 3), capital’s structure management, attracting borrowed funds, accomplishment of credit policy, minimizing of capital’s average cost (aims 3, 4), financial planning and control (aims 2, 3), planning and control of income and expense (in a period, department, assortment), planning of funds’ movement (payments and earnings, acquittal planning and control of debtor’s and creditor’s arrears; investment policy, business planning), financial and economical analysis (aims 3, 4) are of great importance for any enterprize.
Within the finance function two sub groups for finance management may be singled out. Subgroup 1 (secures the achievement of aims 1, 2, 3 and fulfillment of tasks 1, 4, 5) performs the financial accounting, control and analysis, financial planning and price making. Subgroup 2 (secures the achievement of aims 1, 2, 4 and fulfillment of tasks 1, 2, 4) manages the ongoing liquidity and solvency and the finance stability. The decision of such disparate tasks involves complex performance of different roles by the financial function. Thus, the financial function may assume accounting, communication functions (or roles), functions of responsible executor as well as functions of business partner.
Accounting functions provides the transaction processing and accounting at minimal cost, as well as the effectiveness of the preparation of monthly accounts. Communication functions serves to inform interested persons about the results of economic activity. Functions of responsible executor is responsible for ensuring the effectiveness of corporate management and control functions in the field of financial management and operation activities. Functions of business partner support management decision-making related to the development and implementation of strategy, the optimization of the operating business model and the existence in competitive environment.
Good organized financial function is essential for the success of the business in the face of fierce competition, it enables enterprises to achieve tangible results. Poor staged financial function may result in significant costs. References Ghobadian & Woo (2001, June) Benchmarking-Concept and Practice with Particular reference to the Finance Function. Cima Publishing, 212 pages Michael C. Donegan & Thomas F. Donahue (2002, November) Growth and Profitability: Optimizing the Finance Function for Small and Emerging Businesses. SmartPros Ltd. Thomton G. Finance function improvement. Retrieved 2008, from http://www. grantthornton. com/portal/site/gtcom/menuitem. 91c078ed5c0ef4ca80cd8710033841ca/? vgnextoid=e9cad4fa78fe5010VgnVCM100000308314acRCRD&vgnextfmt=default