By Dolly Shah 10M

           

The ‘Finance Department’ has the responsibility to see that the money coming into and out of the business is managed properly. If this is done efficiently then there should be enough money to pay the bills that are due. The ‘Revenue’ is used to pay for the things they had to buy in order to run the business. It is also used to pay the workers. The revenue is the money made by the business by selling its products and services.

     This chart shows the main activities of the ‘Finance Function’:

 

                                               

        

                                                 

The ‘Finance Director’ is in charge of: financial accounting,                                                                           costing & budgeting, managing finance and payroll.

Financial Accounting deals with recording transactions, keeping accounts and preparing the reports for management.

Costing & Budgeting deals with working out the cost of products, analysing past costs and income and setting targets for the costs and income.

Managing Finance deals with working out what resources are needed and raising capital and loans for the finance resources.

Payroll deals with keeping track of the amount of hours worked by employees and calculating the pay & deducting taxes.

‘Keeping records of all financial transactions’ is one of the main functions of the finance department. In this the finance department count all the figures of sales to calculate how much profit or loss the business has made. Once they come up with a total they can then see how much tax the business will have to pay. The department helps the managers to make the right decisions. This function is important to Tesco because if they don’t calculate whether the business is making profit or not then they won’t be able to set proper targets since they won’t know the progress they have made in making profits. Finance won’t be able to advise the managers as effectively to. Tesco is always spending money or receiving it from the sale of goods and services so it is very important that they keep records of whatever they do.

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Preparing Accounts’ is another function of the finance department.  Every business has to prepare accounts to show its financial status during a year. It has to prepare a ‘Balance Sheet’ which records what a business owns and owes (its debts). It also has to prepare a ‘Profit & Loss Account’. This states the income, expenses, profit or loss of the business in the whole year. This function is also very important because they can become useful to different people for different reasons. For example, the ‘Inland Revenue’ can make sure that Tesco has paid the correct amount of tax. Suppliers ...

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