Benjamin Franklin once said that, “Beware of little expenses. A small leak will sink a great ship.” And this quote explains the importance of finance. It is the foundation on which the development and growth of a company are built. It is the elixir that adds life to the business. The importance of anything is measured by the roles it plays. So, to explain the value of finance, our writers who offer finance dissertation help have made a list of the significant roles that finance plays in an organization. Read further to understand them a little more clearly:
Budgeting and Strategic Planning
You must have heard many times about the importance of having your goals set before starting anything. And, the same applies to businesses also. You have to define where you want your business to go, and pin down the objectives. And, then you can ask your financial department about the budget you need to reach where you want to. So, you can’t plan your business even a bit without getting proper support from the finance.
The most critical thing that can be the difference between the business being a success or a failure is how you manage your money. Smart money management is necessary to make sure that the company is on the right path. And, this can only be done by the financial executives. They perform various analysis and, then come up with the right strategies to save money for the business.
Financial forecasting is a vital tool that helps the company to predict its future economic target and performance. According to financial forecasting policy of Harvard University, a business’s success depends largely on the dependability of financial forecasting. This shows how valuable it is. It provides the executives with a financial framework of the future expectations. This helps them in allocating funds and understand the areas where the cost needs to be managed.
Management of business is a very risky job, and it is imperative to have a backup plan for everything. The company has to have a grasp on many factors like currency fluctuations, the direction of interest rates, change in commodity prices etc. And, they can’t do all of these without the help of the finance department. They analyze the whole process, like the risks involved in the investments, loans and other factors. With this, they also prepare backup plans to deal with those risks.
The primary aim of a business is to make profit. And, it is understandable that finance has to play a huge role in it. There are many things that need to be taken care of to maintain the profitability of the company. Finance points out ways to increase productivity, determine the profitability of particular products and help the organization choose the best one to gain more profit.
Manage Employees Salaries and Other Wages
The employees are the most crucial part of the organization. And, salary acts as the motivation for them to work more productively. So, the right management of their salary is a vital task for a company. The finance takes care of their salaries as well as the other wages that the company has to pay for the maintenance, infrastructure, and other different services.
All the above-mentioned roles can’t be fulfilled by the finance department without data analysis. This is the first and foremost thing they do for the organization. They analyze everything related to the market and based on that analysis they provide the base on which the company can build the development.
Even if you consider all the points in this blog, it is impossible to understand the complete importance of the finance in the business. That’s how much value they add to it. But, this blog can provide you a fair idea of the role they play within an organization. If you want more information about it, you can visit a company and see them work closely.