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Every organisation has a finance department. It is the backbone of a company's operations and processes. It records operating transactions, analyzes them and prepares financial statements that inform top management, regulators and investors about a company's economic health.

Responsibilities of a finance department include:

Financial Accounting

The finance department is responsible for keeping records of the purchases and sales made by a business as well as capital spending.

Compliance (preparation of statutory accounts)

Another responsibility of the finance department is to provide management with a profit-and-loss statement, which totals all the sales and purchases across the year. In addition, to produce a balance sheet which summaries the businesses assets and liabilities. A statement of cashflows and a statement of shareholder equity are also required.  Larger firms will employ external auditors who will be managed by the finance dept.

Preparation of the budget & forecasts

It is usually the responsibility of the finance dept to set and agree the annual budgets for the company as a whole and each department.  They will work with managers to do this. They will also provide monthly, quarterly and annual forecast data against budget on an ongoing basis.

Management Information

Management accounting information is information that managers can use to monitor the operations and decide where further attention may be required. The finance department has a duty to provide them with the most accurate and timely information possible, financial and often non-financial.  The finance department is also called upon to provide information to assist managers in making key strategic decisions, such as which markets or projects to pursue or the payback periods for large capital purchases.

Analysis of financial performance

This provides how the organisation is doing against its budget and is usually produced on a monthly basis. Both revenues and costs would be analysed as well as detailed profitability analysis against various products, services, and departments. Finance will measure and report regularly on key numbers crucial to the success of the organization.


This section is responsible for the payment of all wages and salaries of employees.  The wages section also organises collection of income tax and national Insurance for the Inland Revenue.

Accounts Receivable & Payable: The finance department is responsible for the payment of supplier invoices, the issuing of its own invoices and chasing those debts when they have not been paid on time. This area also encompasses the credit and collections policies for the company’s customers, to ensure the organization is paid on time, and that there is a payment policy for the company’s suppliers.


Where there are cash needs beyond the day to day working capital, the finance department is responsible for advising and sourcing longer term financing. Financing may be obtained though bank or private lender debt or, in applicable firms, share issues to private investors. They are responsible for setting up the loans and the repayment of interest on that finance.  The finance department will also supervise the payment of dividends to shareholders.

Treasury & Cash Management: many firms have significant amounts of cash and assets, which the finance dept invests. The finance dept is responsible for investing this either short term or long term in order to extract the maximum return. It will also be investing such that it hedges any foreign exchange risk it may have, so to reduce the risk of a currency moving against it when it still has exposure to it. The finance department is also responsible for management of the organization’s cashflow and ensuring there are enough funds available to meet the day-to-day payments.

Tax Planning

Evaluating a firm's data and advising top management on tax saving strategies and compliance with fiscal regulations. Tax accountants also help a company file corporate income returns or calculate sales taxes collected in business transactions.

Corporate Activity

in any merger or acquisition, the finance dept will play a significant role.  They will be key in preparing the documents required for these sorts of presentations and may work with outside consultants on company valuations. In larger firms considering public share offerings, the finance department will assist with the preparation of the offering documents but will likely also use outside consultants to advise on this complicated process.

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