Professional Documents
Culture Documents
Department
Higher Grade Business Management
2009
Financial Objectives
Different types of organisation have different
financial objectives:
e.g.
Vodafone: aim to make a large profit.
Charities: aim to get many donations and help people
as best they can.
Clubs: aim to use funds to give the best possible
service to their members.
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Payment of Accounts
The Finance Department needs to ensure that it
makes payment to its suppliers on time, as well
as collecting money owed by customers.
Payment to suppliers fall into two different
categories:
Cash
Credit
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Maintenance of
Financial Records
The Finance Department will record financial
transactions, so that at the end of the year or period
it can prepare final accounts.
Financial records are a history of the organisations
activities.
Under the Companies Acts of 1985 and 1989, it is an
offence for limited companies not to maintain
proper financial records.
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Business Decisions
Without proper financial records,
organisations are unable to operate
efficiently or effectively:
How much money has the business spent?
How much has the business sold?
What is the value of the businesss assets?
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Answering Questions
The job of an accountant is to use the information
from the accounts to answer questions such as:
Identifying Appropriate
Financial Information
One of the major roles of the Finance Department
is to identify appropriate financial information,
before communicating this information to
managers or decision makers.
By communicating this information the Finance
Department ensures that informed judgments
and decisions can be made.
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Different Forms of
Financial Records
Financial Records can take several forms:
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Payment of
Invoices
Production of
Internal Financial
Information (e.g. budgets)
Production of
Organisations
Annual Accounts
Analysis of
Financial Information
(e.g. ratio analysis)
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Task
Read pages 176-178 from the textbook
Higher Business Management
Using the knowledge gained from this
presentation and the relevant pages in the
textbook, answer the questions on the Role
of the Finance Department.
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