8. Operating levels of Finance Function Flashcards

1
Q

What are the four sections of the diamond structure of the finance fucntion

A

Level 4: Financial operations (accoutning, management, treasury, internal audit)

Level 3: Specialist Finance areas - digital centre of excellence(planning and analysis, Tax, Project management, appraisal)

Level 2: Strategic business partnering and decision making

Level 1: Strategic leadership

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2
Q

What are the four main componenets of finance function

A

Financial Reporting
Management accounting
Treasury
Internal audit

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3
Q

What inisights does financial accounting componenet provide

A
  • Financial statements
  • Fashboards of financial ratios
  • Reporting for external stakeholders
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4
Q

What insights does management accou nts provide

A
  • Monthly management accounts
  • Variance analysis
  • Real time monitoring of performance
  • Budgets and forecast
  • KPIS
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5
Q

What does the treasury componenet do?

A
  • Working capital
  • Investment sources
  • Monitoring and predicting future currency and interest rates
  • Predicting demand of share prices
  • Report to directors of company
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6
Q

What does internal audit funciton do

A
  • Analysis of internal control systems
  • Monitoring internal compliance with procedures
  • Prevent and detect fraud
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7
Q

What is FP&a

A

Financial planning and anlysis department
- Teams set to monitor and evaluate progress in achieving goals and objectives
- Analyse organisation’s performance using quantitatvive and qualitative information

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8
Q

What insights are provided by the FP&A

A
  • suggestions on surplus assets
  • assessments of overall financial health
  • budgeting, forecasting
    -identify most profitable products
  • developing master budget
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9
Q

What doe taxation teams do

A
  • Minimise risk and create value
  • By lawfully reducing tax payable
  • Calculation of coporation tax
  • minimising risk of non compliance
  • liasing with tax authorities
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10
Q

What insights do taxation teams provide

A
  • Impact of projects and forecasted future performance on tax liabilities
  • Monitor correct treatment of taxation
  • Identification of tax loopholes and legal opportunities to reduce tax liabilities
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11
Q

What do project management teams do

A
  • Work to ensure projects are delivered on time, at right quality and within budget
  • maximise use of resourcess - quality, time and budget
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12
Q

What insights do project management teams provide

A
  • Project plans on scope and resources
  • creating project budgets
  • monitoring project risks
  • post review of project
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13
Q

What are the stages of project managemtn

A

1: Initiation: need of project and appraisal feasibility

  1. Planning: establish resources neeeded and measure of success
  2. Executing: perform project
  3. Controlling: progress, cost and performance are monitored
  4. Review and close: sign off project and disband
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14
Q

What is the role of project appraisal teams

A

Analyse financial and non financial aspects of potential projects
-estimates of cost and benefits of project
- whether to provide with investment

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15
Q

What isngihts do project appraisal teams provide

A
  • Advice on whether project will add value
  • what value it will add
  • Value of non financial costs and benefits
  • Scenario analysis of project risks
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16
Q

What is meant by business partnering

A

Finance funciton embedding and working alongside other functions to add value

17
Q

What is strategic partnering for value

A

Extends the concept of business partnering to most senior levels within organisation
- to influence decisions
- to support decisions
- to achieve desired impact

18
Q

What are the benefits of strategic partnering for value

A
  • Ensuring SLT have good information
  • Being voice of reason
  • Being trsuted source of information
  • Being forward thinker of business indicator
19
Q

What is strategic leadership of finance function

A
  • Level 1
  • CFO/ Finance director + senior finance managers
  • Achievement of desired organisational impact
  • Board of directors - chair, ceo etc
20
Q

What attributes are needed of the senior finance team

A
  • Knowledge: technical expertise and qualification
  • Skills: Ability to perform role and apply knowledge
  • Expertise: Familiarity of particular area
  • Balance of knowledge, skills, expertise