The Finance and Accounts Division are essentially an administrative service outfit entrusted with the day-to day management of accounting and financial functions (accounting and accessing of accounts, recording and reporting of expenses, control of assets). They ensure that the accounts are regularly maintained. They also ensure the smooth functioning of the internal control mechanisms of the organization. This division is usually divided into various departments or units for further management and audit of the financial matters. These departments or units include the following: Finance; Real Estate; Corporate Finance; Law and Commission; Internal Revenue Service and many more. They are also assigned various responsibilities in the performance of their responsibilities by other departments or units within the Finance and Accounts Department aat level 2.
The main purpose of the Finance and Accounts Department is to provide accounting and financial solutions to organizations by providing efficient budgeting controls and other management tools. They perform the functions such as developing the internal management tooling and methodologies for managing the accounts and reports generated from the accounting work. These include: assessing the financial condition; preparing the financial plan and the budgets required for the accomplishment of the plan; maintaining proper record of all transactions involving cash, assets and liabilities.
In order to obtain the above mentioned services aat level 3, it is necessary for the Finance and Accounts Departments to appoint a designated individual to be an Assistant Secretary to the Deputy Director and as a member of the Accounting and Finance Department. This individual must have an MBA degree having accountancy as one of the degrees that qualify for this post. This individual can also be a Certified Public Accountant (CPA) with a three-year experience in this field, having served for at least two years as a deputy director and having the responsibility of overseeing the accounting department. Besides, he/she must have a legal background having the responsibility of inspecting accounts receivable and accounts payable. All of these duties and responsibilities of the assistant secretary should be fulfilled by a certified public accountant or an enrolled agent.
The deputy director should ensure that there is regular reporting by the Finance and Accounts Departments to the CPA, Financial Reports of the Public Company and the shareholders or bondholders of the company for the purpose of budgeting and financial statements preparation. The assistant secretary should ensure that the company reports its results regularly to the government agencies concerned for such purposes. This would ensure better efficiency in the company. This would also help in improving the quality of finance and accounts departments.
The budget officer of the company performs the role of planning the budget of the organization. In his position he/she would have the responsibility of collecting the financial data for planning the finance department. He would keep a track of all the expenses, income and transactions in the company. The collection of data would enable the manager to formulate a budget, keeping all the necessary factors and affecting the business. The officer should be responsible for producing the monthly financial statements to the CPA, shareholders or bondholders for review.
The responsibilities of the accountant and the finance officer should not be combined, as this would increase the efficiency and the productivity of the firm. It should be clearly defined where and by whom these two different functions are performed. There are many examples of a well established company where the manager of one department has the responsibility of preparing the financial statements as well as that of preparing the budget. This separation provides opportunity for developing good interdepartmental contacts, increasing mutual trust and confidence and helping to reduce the overall cost of running the company. This way we can see how Finance and Accounts play a vital role in every organization, whether large, medium or small.