The Finance Function

Question 1

What are the functions of a business?

Answer 1

1) Operations/Production
2) Accounts & Finance
3) Marketing and Sales
4) HR
5) IT
6) Distributions and Logistics

Question 2

Which piece of info would the finance function receive directly from the HR function?

Answer 2

Hourly rate of pay

Question 3

What is the role of the finance function?

Answer 3

1) Production of financial statements
2) Recording transactions
3) Banking of cash and receipts
4) Producing and filing docs required by law
5) Maintaining general ledger accounts and accounting records
6) Producing info
7) Producing management accounts
8) Producing summaries and reconciliations

Question 4

Additional finance function roles

Answer 4

1) FF may Provide info to other business functions or to outside stakeholders

Question 5

Tasks that may be outsourced

Answer 5

1) Payroll
2) Prep of management accounts
3) Prep of annual tax return
4) Prep of VAT returns
5) Internal audit
6) Ad Hoc investigation work

Question 6

What is solvency?

Answer 6

Financial soundness. Must have cash available to meet obligations.

Question 7

Ways to improve solvency

Answer 7

1) Regular bank reconciliations
2) Avoid overdraft
3) Maintain SLCA
4) Maintain PLCA/Beware liabilities
5) Forward planning/budget to see if should extend credit/loan facilities
6) Forward planning to Id if should use/offer discounts/credit facilities

Question 8

Legal Requirements

Answer 8

1) VAT return and submission dates
2) Corporation tax for ltd companies
3) Health and safety
4) Data protection
5) Accounting requirements - submit financial accounts to Companies House - they are publicly available

Question 9

Internal policies and procedures

Answer 9

1) Overtime payments
2) Purchase ledger payment procedures
3) Justification of cost of record keeping
4) Expenses policy
5) Authorised signatories