What is the purpose of a finance department?
Credit:Andrew RichVettaGetty Images
Q:

What is the purpose of a finance department?

A:

Quick Answer

The finance department in an organization oversees financial planning and management activities, including budgeting and forecasting, reporting and compliance, and creation of value. Some of these responsibilities help the organization meet compliance obligations. Others contribute to profit-building for the company.

 Know More

Full Answer

Budgeting and forecasting is completed on a regular basis in companies. The finance department prepares historical documents and projects to aid leaders in developing forward-looking budgets. Leaders in finance inform executives about any changes to projections based on over- or under-developing sales results.

Reporting and compliance is a major role, especially in a public company, because it must issue regular earnings reports to inform shareholders and the public about its current financial position. The finance department prepares common financial statements that meet Securities and Exchange Commission requirements. Company leaders than present this information in a press release and often in a conference call with analysts. Finance departments also prepare internal financial reports that are used by managers for decision-making.

Increasingly, companies rely on finance departments for strategic planning and risk analysis before making investment decisions. Before a company invests in new property or equipment, for instance, the finance department might prepare a risk analysis report. Finance departments also play a key role in advising on business investment activities.

Learn more about Corporations

Related Questions

  • Q:

    What does the human resources department do?

    A:

    The human resources department functions to maintain a high-performance workforce and ensure compliance with laws and regulations, according to the University of Rhode Island. It has a strategic plan to ensure the company has the best available employees to fulfill company goals, oversee employee performance and support the company's culture.

    Full Answer >
    Filed Under:
  • Q:

    What is a police inspector's responsibility?

    A:

    As second in command of a division or section of a police department, a police inspector is responsible for assigning work to police officers, supervising their work, and enforcing compliance of department policies and procedures, according to New Jersey Civil Service Commission. A police inspector may also help formulate a bureau's policies and procedures while also conducting inspections to ensure personnel, performance and equipment are in compliance.

    Full Answer >
    Filed Under:
  • Q:

    What is an organization's purchasing department?

    A:

    An organization’s purchasing department bears the responsibility for procuring materials, supplies and services, as Reference for Business explains. Employees in the purchasing department are called buyers, supply managers or purchasing agents. Purchasing means obtaining appropriate materials, services and technology from the right source, in the right quantity and at the right time.

    Full Answer >
    Filed Under:
  • Q:

    What is the Human Resources number for Best Buy's corporate offices?

    A:

    The phone number for Best Buy’s Corporate Human Resources department is 1-866-692-2947 (1-866-MY-BBY-HR). This toll-free number connects callers to Best Buy’s automated Human Resources Support Center.

    Full Answer >
    Filed Under:

Explore