5 Functions of the Finance AreaProper financial planning is essential for the survival of a company. Even if you do not have a specific area, every SME must ensure that they perform these tasks.
It is common to see that entrepreneurs and SMEs focus on "what", "how" and "for whom" to produce or develop the product / service before thinking about the utilities and related tasks. They feel more comfortable in commercial or production issues than in financial matters. However, the finance area is a fundamental piece for the development and sustainability of any business. Some of the tasks he carries out are:
"The finance area is a fundamental piece for the development and sustainability of any business"
- Register accounting operations and financial data, in order to obtain the current and historical business information in order to plan and make the appropriate decisions . This function is as important as the following ones since what is not registered, is not managed or, in other words, what is recorded is managed.
- Plan, analyze and evaluate the recorded information . For this, it is necessary to know in depth the business situation through the preparation of the budget , flow of funds , indicators and cost analysis.Proper planning can establish future objectives, payment strategy, collections and investments seeking growth and greater profitability of the business, foreseeing deviations and anticipating unfavorable situations.
- Search funding sources and select the most suitable for entrepreneurship . There are different financing options and each company should analyze which one best suits their needs. Among them, seed capital of different organizations , angel investors , family & friends and bank loans.
- Look for investment options that the business can count on , and select the one whose profitability is commensurate with the financial capacity reached. Among the options, there are several alternatives such as the acquisition of assets, new machinery, purchase of securities, shares or shares of mutual funds and deposits of bank accounts.
- Control the operations executed and registered in order to, if necessary, rectify errors or omissions for the subsequent analysis of deviations in relation to the initially developed budget, seeking the highest possible efficiency.