What are the functions of the financial area of a company?
The finance department of a company plans, manages its finances and ensures the sustainable acquisition of liquidity. In this article we tell you what the functions of the financial area of a company are. Also, we invite you to get to know the Finance master that at EIA University we have for you.
The main function of the finance area is to settle the financial obligations of the company. In addition to managing the company's revenue and expense items, it is understood that this area is the cornerstone of every business, as the organization is completely dependent on knowledge of how to properly manage the economy.
What influence does the financial area have on investments?
Investment is believed to be part of finance and both contribute to the economic well-being of the company, it is worth knowing that in addition to a close relationship, both are extremely necessary. These are important for several reasons, such as:
- The investment allows you to grow your assets and generate an additional income flow.
- Investments that offer returns above inflation help keep pace with and beat inflation.
- Finance helps companies manage money and capital favorably, so that business decisions generate benefits.
- They are an integral and fundamental part of the organizational structure, as they directly influence all relevant aspects.
Functions of the financial area
The functions of the financial area are all the functions linked to the economic situation of the company. Consequently, although the management of income and expenses is its main function, the following functions also fall under the department:
- Develop the financial organization model: Served to present a simplified version of a company's reality, the financial organization model works simple versions of real factors and reflects them to facilitate the execution of mathematical calculations on the data.
- Administration of loans and investments: invest the benefits obtained from the various activities of the company, the department must have the necessary knowledge to know where it can obtain greater dividends and generate greater profits.
- Planning and budgeting: Drawing up budgets is the job of a company's finance department, as they are the ones who know exactly the expenses and income of the company's activities.
- Establish financial responsibilities: The finance function, together with the management area, has the responsibility of supervising the correct management of resources, which implies involvement in the actions that the company will carry out in the future to prevent it from committing imprudent actions or actions that constitute a tax crime that could threaten its stability.
- Management of financial problems: handle economic problems in case they arise.
- Payment of workers' payroll: Payments must be made periodically, in many cases they are not made automatically, but the finance department does.
In companies that generate large revenues that are difficult to manage in administrative areas, the finance department is essential. However, all businesses need to carry out financial analysis to adequately support their operations, the duties of a financial professional can be performed by one person as long as the business is not large.
Characteristics of the financial professional
The financial professional has its own characteristics that distinguish it from other fields:
- Ability to detect opportunities: knowing when a situation becomes a business opportunity, even when that situation has no favorable prospects.
- Be creative: Have the ability to create and promote new products and services.
- Ease of making decisions: know the company, know the market, evaluate the risks and act with precision, always starting from the assumption that ethics are the basis for the development of any action.
- Adapting to changes: Changes are not only healthy, but necessary, as they help reorganize ideas, ways of working and how you reach your target audience.
- Ability to lead a work team.
Master's in Finance student profile
This specialization is aimed at professionals in administration, economics, engineering and related areas who seek a solid and advanced financial education; who hope to fill management positions in the area.
The program of Finance master It is aimed at professionals who work as analysts, leaders, directors or managers in organizations in the real or financial sector, or professionals who wish to project themselves into this type of position. Graduates from all areas of knowledge can apply, who need to qualify, deepen and specialize their financial skills for reasons of professional practice.
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