Industries

 
   

 

 
     
 
 
 

Finance and Accounting Management

 
 

Overview

 
 


Finance departments use finance and accounting (F&A) systems to meet internal as well as external financial needs and compliance deadlines. These systems allow companies to achieve productivity gains, reduce implementation time and costs, and lower risks associated with human error, employee changes, and other factors. Finance and accounting share the same goal-how to keep track of a firm's financial assets and fund flows. They provide answers to questions such as the following: What are the current financial assets? What is the cash flow situation? What records exist for payables, receivables, payroll, and other fund flows?

The finance function concentrates on managing the firm's financial assets, such as cash, stocks, bonds, real estate and other investments. The goal is to maximize the return on these financial assets. To determine if the firm is getting the best return on its investments, the finance function depends on a considerable amount of information from sources external to the firm.

The accounting function focuses on maintaining and managing the firm's financial records (e.g., receipts, disbursements, depreciation, payroll) to account for the flow of funds in a firm. After the financial scandals of early 2000 (e.g., Enron), many government regulations such as the Sarbanes-Oxley (SOX) Act drive the accounting practices.

F&A systems exist at several levels in organizations. Operational systems in F&A track the flow of funds in the firm through transactions such as paychecks, payments to vendors, securities reports, and receipts. At the management level, F&A information systems help managers oversee and control the firm's financial resources. Strategic-level systems for F&A establish long-term investment goals for the firm and provide long-range forecasts of the firm's financial performance.