Function of Finance Department

 There are many types of department present inside organization. These are Marketing department, Human resource department, Production department and Finance department. Every department plays a different role for the survival, growth and profit maximization. Production department makes policy rules, regulations and law toward Procurement, Purchasing, Transportation, Inventory control etc whereas Finance department arranges, expends, invest and reinvests finance in such type of ways that every function of organization becomes effective, efficient and economical and organization achieve its predefined goal so we can say that Finance department is very important for the profit maximization of organization. 

The most important function of Finance department is as below-

1. To make budget- it is the first function of Finance department. Budget is the collection of financial documents in which coming income and expenditure is systematically recorded. Finance department makes budget for every coming year and ensures every function of organization is economically performed at right time. 

2. Book keeping- it is the second and basic function of organization. There are many financial documents organization makes. These documents are Journal, Ledger, Trial balance, Cash book, Profit and loss account and Balance sheet. Finance department ensures all documents are prepared at right time according to accounting concepts and convention. 

3. To ensure proper cash flow- Every organization purchase many things at cash basis daily. They also pay wages to daily workers so they need sufficient cash at every time. It is the function of Finance department to implement such type of credit collection and payment policy that the financial goodwill of organization maintains in the business's world. 

4. To pay tax- There are three types of government present in the country. These are local government, state government and central government. Every government collects different type of tax from company. It is the function of Finance department to ensure every tax pay to every government at right time to save company from tax conflicts. 

5. To minimize financial risk- Today whole world becomes a village. Every multinational company, large scale company produces every type of product in this village so business is full of risk. It is the function of finance department to make, implement and execute such type of planning, policy, rules and regulations to save company from risk. 

So we can say that Finance department is an important department that ensures every function of company is performed by an effective, efficient and economical way and company achieve its goal.