8. Operating levels of Finance Function Flashcards
What are the four sections of the diamond structure of the finance fucntion
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
What are the four main componenets of finance function
Financial Reporting
Management accounting
Treasury
Internal audit
What inisights does financial accounting componenet provide
- Financial statements
- Fashboards of financial ratios
- Reporting for external stakeholders
What insights does management accou nts provide
- Monthly management accounts
- Variance analysis
- Real time monitoring of performance
- Budgets and forecast
- KPIS
What does the treasury componenet do?
- Working capital
- Investment sources
- Monitoring and predicting future currency and interest rates
- Predicting demand of share prices
- Report to directors of company
What does internal audit funciton do
- Analysis of internal control systems
- Monitoring internal compliance with procedures
- Prevent and detect fraud
What is FP&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
What insights are provided by the FP&A
- suggestions on surplus assets
- assessments of overall financial health
- budgeting, forecasting
-identify most profitable products - developing master budget
What doe taxation teams do
- Minimise risk and create value
- By lawfully reducing tax payable
- Calculation of coporation tax
- minimising risk of non compliance
- liasing with tax authorities
What insights do taxation teams provide
- 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
What do project management teams do
- Work to ensure projects are delivered on time, at right quality and within budget
- maximise use of resourcess - quality, time and budget
What insights do project management teams provide
- Project plans on scope and resources
- creating project budgets
- monitoring project risks
- post review of project
What are the stages of project managemtn
1: Initiation: need of project and appraisal feasibility
- Planning: establish resources neeeded and measure of success
- Executing: perform project
- Controlling: progress, cost and performance are monitored
- Review and close: sign off project and disband
What is the role of project appraisal teams
Analyse financial and non financial aspects of potential projects
-estimates of cost and benefits of project
- whether to provide with investment
What isngihts do project appraisal teams provide
- Advice on whether project will add value
- what value it will add
- Value of non financial costs and benefits
- Scenario analysis of project risks
