Knowledge Galaxy | Why Businesses Need a Good Finance Team?

Edited by Rivermore Academy

As the wave of layoffs intensifies, you may have heard of tech giants laying off tens of thousands of employees, or e-commerce platforms like Lazada or Shopee cutting thousands of jobs. Even CEOs aren't safe from the chopping block. But have you ever heard of a good finance professional getting laid off?

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Finance Management: The Lifeblood of Company

Finance management involves controlling the flow of funds within a business, including tasks such as selling products or services, paying expenses, reconciling accounts, and filing taxes. It also involves more complex processes like payroll management, procurement, and compliance reporting to government agencies. Finance management oversees and manages all these business transactions. Generally, the larger the company, the more complex the finance management.

Finance professionals are responsible for managing all the inflows and outflows of funds within a company. In small companies, it may only require an accountant or bookkeeper working with banks to handle these tasks and track fund movements. In larger enterprises, it's typically led by individuals such as Chief Financial Officers (CFOs), finance managers, finance directors, or similar roles who oversee the entire finance team.

What Else Does Finance Do in a Business?

The work of finance management in a company covers almost all aspects of the business processes, departments, and teams. A good finance team needs to address the following tasks:

Invoicing and payments	Scenario modeling, planning, and budgeting
Accounts payable	Payroll and expenses
Bank transactions and reconciliation	Cash management and forecasting
Closing financial statements	Tax strategies
Reporting to boards, investors, shareholders, etc	Risk control and compliance

Why Is Finance Management Important for Businesses?

For a business or company, finance management is a crucial profession and function.

1. Provides Economic Data Support for Businesses: Finance professionals use accounting, financial management, and other tools to provide various economic data support to companies, including financial statements, cost accounting, budget management, and investment analysis. These data help companies understand their economic conditions and operational efficiency, providing a basis for decision-making.
   

2. Controls Business Risks: Finance professionals assist companies in controlling risks by effectively managing funds, investments, debts, etc., to ensure stable operations. They also strengthen internal controls and compliance management to ensure that companies comply with relevant regulations and standards, avoiding adverse impacts from non-compliance.
   

3. Participates in Strategic Decision-Making: Finance professionals play a significant role in companies, understanding the company's strategic objectives and development directions, and providing financial decision-making support. They need to have strategic thinking, integrate financial management into corporate strategic planning, and provide targeted advice and decision-making support to companies.
   

4. Promotes Sustainable Business Development: Finance professionals drive sustainable development by achieving the company's financial goals. They need to master skills such as cost management, budget management, and fund management to help companies optimize cost structures and cash flows, improve profitability and competitiveness, and achieve sustainable development.