Importance of Finance in an Organisation

[vc_row css=”.vc_custom_1506499624337{padding-top: 30px !important;}”][vc_column][vc_column_text]All activities within a firm usually revolve around money. It is the responsibility of the finance department to control the costs and come up with measures that guarantee an organization’s existence in harsh economic environments. Therefore, the importance of finance in an organisation should not be underestimated.

For any organization to grow, it needs to come up with a financial plan that ensures a continuous flow of funds. The finance department makes a decision on how these funds will be raised by the company. It will also determine the most appropriate source of these funds depending on whether it is long-term or a short-term measure.

After a company gets funds, the finance department has to determine how these funds will be allocated. This is done to ensure that the funds are used optimally without going over the set budget. All departments in an organization will request for funds, but it’s the finance department that will assess and allocate the funds.

All organizations have the sole aim of making a profit. The finance department in an organization will come up with a plan on how to spend the profit. Without a finance department, the management may not know how much money they will need in the next financial year.

Due to the risky nature of stock markets, a company needs a financial planner who can assess the risks involved. He will assess the effects of a business decision on the stock price. If the decision is likely to lower the stock price, he advises the board of directors to look for alternatives.

Any company that does not acknowledge the importance of finance in an organization is bound to fail sooner rather than later. Therefore, financial planning has to be integrated with the overall strategy so as to realize the objectives of a company. This should apply to both small and big businesses that want to succeed.[/vc_column_text][/vc_column][/vc_row][vc_row fullwidth=”true” fullwidth_content=”false” css_animation=”element_from_left” row_type=”row” use_row_as_full_screen_section=”no” type=”grid” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern” background_color=”#f5f3ef” padding_top=”100″ padding_bottom=”86″ transition_delay=”700″ css=”.vc_custom_1506468737836{padding-top: 30px !important;padding-bottom: 30px !important;background-color: #083d69 !important;}”][vc_column][vc_column_text align=”center” animation=”fade-in” css=”.vc_custom_1506499376221{margin-bottom: 0px !important;}”]

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