Role of Finance

The role of the finance function

Finance is important to every organisation, because all organisations have to deal with money. 

Every organisation must manage its finances efficiently to ensure the success of its business – whatever this is.  For example, every organisation must make sure that it: 

• has enough money to pay the wages and salaries of its employees
• has enough money to pay its bills – for things like supplies of raw materials, electricity, advertising and so on
• has enough money to develop new products to avoid being overtaken by competitors

• Checks how much it is spending – organisations, which have high costs, are often unsuccessful.
   
  The finance department is responsible for the financial affairs of the organisation.  Its role is to manage the finances of the organisation and to make sure that the organisation meets its financial objectives. 
   
  The role of finance is to:
   

• Pay wages and salaries to employees
• Pay bills, e.g. electricity, insurance and advertising
• Record and maintain financial records, e.g. cash budgets and profit statements