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Corporate Finance Department

 

September 24, 2024

 

By Thals R Volmar

 

 

The corporate finance department is intended to be as important as the enterprise's general administration, the small nuance here is that it is preferably headed by the general administration. Not all enterprises have a financial management department, because such a management department is subject to contraints in terms of human and budgetary resources. Only large SMEs and large enterprises have a financial management department.

 

In micro and small businesses, the owner or entrepreneur and/or the manager or head simplifies the functions financial management with the responsability of control and accounting. However, the control mentioned here is subject to accounting, and in those environnements, we are dealing only with operations related to financial accounting by means of accounting notebooks, software, etc., and not an office that handles the financial matters of the business. For the most part, it is the head of the business that fulfills this/these function(s).

 

In medium and large enterprise (MLEs), the finance department is set up for the management of accounting and financial matters. Its mission is to administer and manage the enterprise's financial matters, and this is what makes it so important. Internally, it exercises its financial management powers over all departments or sections and even branches depending on the size and organization chart of the enterprise through its financial control module; from the general administration that it serves as an advisor to the simple expenditure for the purchase of mineral water for people.

 

The corporate finance department exercises its functions of financial management and control thanks to the know-how of resource persons such as, in chief, the accountant, the controller, the treasurer, the financial analyst, and so on. As a result, the control and management services of the financial department rigorously extend to all operations that relate to the income and expenditure of the enterprise. All the services or department of the enterprise need money to operate, therefore the finance department extends its actions to all of them.

 

You are not unaware that the general financial director commonly known as chief financial officer (CFO) that is the head of the finance department since the controller, the chief accountant, etc., are directors, and/or assistant directors can bring employees from other departments into his/her office to question them on matters related to the corporate's revenue and expenditure operations. During meetings or assemblies of the corporate's directors, the voice of the general financial director is one of the most listened to or important.

 

From what is said above, the corporate finance department groups its operations into five categories: 1. budget; 2. financing; 3. revenue; 4. working capital; 5. and control. As a matter of fact, it participates in the development of sttrategies of the corporate in accordance with the taxation and objectives established by the general administration and/or the administration board. At this point, it intervenes mainly upstream through budget and financing operations.

 

Externally, the corporate finance department remains up to date with the market that it evolves in terms of tax regulations and others. As the guarantor of the enterprise's good financial health, it intervenes upstream and downstream to ensure the profitability of the enterprise. For exemple, without the advice of the marketing and/or sales department, it can block or close customer accounts if it judges that they are not in line with the enterprise's financial strategies; it can have a product removed from the market if it judges that it is not profitable for the enterprise, and son on.

 

Internally and externally, the corporate finance department is also an executive and decision-making body that controls the enterprise's operations to ensure that it is profitable and solvent. It also plays a proactive role in the actions to be taken to optimize the enterprise's activities and ensure its sustainability. So important, in times of crisis and/or upheaval, it is the ideal body to be able to act to enable the enterprise to be resilient.