DEPARTMENT OF

FINANCE AND ACCOUNTING

By- Abhishek Tanguturi

 OBJECTIVES

Know about Finance Department

Important functions of Finance Department
Finance Department in Small Businesses
Know about Accounting Department
Important functions of Accounting Department
Difference between Finance Department and Accounting Department
 • FINANCE DEPARTMENT
• What is FINANCE DEPARTMENT?
• What are the functions of FINANCE DEPARTMENT in a Company
• Bookkeeping and payables/receivables
• Financial reporting and control
• Tax and Compliance
• Strategic planning and Financial planning & Analysis
CONTENTS • Treasury and Working capital management
• Capital Budgeting
• Risk management
• Corporate Development and Corporate Strategy
• FINANCE DEPARTMENT in a Small Company
 • ACCOUNTING DEPARTMENT
• What is ACCOUNTING DEPARTMENT?
• What are the functions of ACCOUNTING DEPARTMENT in a
Company
• Billings
• Collections
CONTENTS • Financial Statements
• Internal Reporting
• Payables
• Payroll

• Differences between FINANCE DEPARTMENT AND

ACCOUNTING DEPARTMENT
 MONEY

CONTROLLING
COMPANY’S
WHAT IS FINANCE PLANNING
AND
FINANCE DEPARTMENT? ORGANIZING

AUDITING AND
ACCOUNTING
 IMPORTANT FUNCTIONS
OF FINANCE DEPARTMENT
 Most basic financial activity

BOOKKEEPING
Tracks all the transactions

Covers both sales and expenses

 More judgment than the bookkeeper’s role

Transform into usable and comparable financial

statements
FINANCIAL
REPORTING Designing financial processes of the organization

AND CONTROL Selecting accounting systems

Liaising with external auditors

No gaps or oversights in existing processes.

 Doing a lot of calculations

Filling out a lot of forms

TAX AND
COMPLIANCE On-time to the taxman

Minimize tax

Maximize the net income

 True bridge between the Past and the Future

 STRATEGIC Creates strategic and financial plans 

PLANNING AND
FINANCIAL They compare actual results
PLANNING &
ANALYSIS
Determine areas where the business can improve

Annual forecasts 
 Company doesn’t run out of
cash

TREASURY &
WORKING Forecasting the upcoming
working capital needs of the
CAPITAL company
MANAGEMENT

Managing currency risk

 Selecting between the various
uses of capital or capital projects

CAPITAL
Identify the most effective
BUDGETING projects

Determines whether the use of

capital was as effective as
originally anticipated
 Developing after the financial scandals of
the early 2000s (Enron, WorldCom, the
Great Recession and Lehman/Bear
Stearns collapse, etc.)
RISK
MANAGEMENT
Looks at some of the key risks faced by
the company—currency, interest rate,
market, operational, legal, etc.
 Heavily populated by former investment bankers
and management consultants

sourcing and analyzing mergers & acquisitions

deals
CORPORATE
DEVELOPMENT raising debt and equity financing
& CORPORATE
STRATEGY
making capital structure decisions

providing insight into high-level strategic

decisions such as entering a new market
 • Third Party Finance Departments
IN SMALL • Chartered accountant
BUSINESSES
 WHAT IS ACCOUNTING
Payrolls DEPARTMENT?
IMPORTANT FUNCTIONS
OF ACCOUNTING
DEPARTMENT
 A billings group assembles information from the
shipping and customer order departments to
BILLINGS
create invoices that are sent to the company's
customers
  The accounting department is responsible for
keeping track of overdue invoice payments from
COLLECTIONS customers and uses a variety of methods to
extract payment from them, including dunning
letters, phone calls, and attorney letters.
 A reporting group within the department
creates adjusting journal entries to bring the
FINANCIAL company's initial financial results into
STATEMENTS compliance with the applicable accounting
framework, writes footnotes to accompany
the financial statements, and releases financials
following the end of each reporting period
  A cost accounting staff can provide considerable
value by calculating the profitability of various
products, product lines, services, customers, sales
INTERNAL regions, stores, and so forth. The areas of analysis
REPORTING may change on a regular basis, so that
management can view different aspects of the
business, with an emphasis on improving
financial results.
 The payables staff collects supplier invoices and
employee expense reports, verifies that the billed
amounts are authorized for payment, and issues
PAYABLES payments to recipients on scheduled payment
dates. These employees also watch for early
payment discounts, and take the discounts if it is
economical to do so.
 A specialized group collects time worked
information from employees, as well as pay rate
information from the human resources
PAYROLL department, calculates tax and other deductions
from employee pay, and issues net pay amounts
to employees, either in cash or via checks, pay
cards, or direct deposit.
 DIFFERENCE BETWEEN FINANCE AND
ACCOUNTING
FINANCE
Finance is a broader term for the management of assets
and liabilities and the planning of future growth
If you want to exercise high-level control over a
company’s strategy
Finance is about looking forward and growing a pot of
money or mitigating losses
Macroeconomics, international finance,  financial
engineering and corporate finance
ACCOUNTING
Accounting focuses on the day-to-day flow of money in
and out of a company or institution
If you want to take a detailed look at a company’s books 
Accounting is more about accurate reporting of what has
already happened and compliance with laws and
standards
Accounting practices and accounting ethics, business law,
tax law and accounting theory