Question

Explain the functions of finance and accounts department.

Answer 1

1. Planning for funds: Initially, a well-structured financial plan is created. It estimates the funds needed for both long-term (fixed assets) and short-term (current assets) requirements and identifies suitable sources to obtain these funds.
2. Raising of funds: Money is obtained from different sources by issuing shares, debentures, and other financial instruments.
3. Allocation of funds: The raised funds are distributed while considering the potential profitability and liquidity of their different uses.
4. Management of assets: Policies and plans for managing fixed and current assets are implemented to protect them and ensure they are used most effectively.
5. Management of earnings: The business’s income is divided between reserves and dividends, and a suitable dividend policy is established.