Finance
Texts for supplementary reading
Finance, basically, is the function in a business that is responsible for acquiring funds for the firm and managing funds within the firm (for example, preparing budgets, doing cash flow analyses, and planning for the expenditure of funds on such assets as plant, equipment, and machinery).
The firm has little chance for survival regardless of its product or marketing effectiveness without a carefully calculated financial plan. Most organizations will have a manager in charge of financial operations. Generally, this chief financial officer is known as the treasurer or vice president of finance. The fundamental charge is to obtain money and then plan, use, and control money effectively.
You are probably somewhat familiar with several finance functions, for example, the idea of buying merchandise on credit and collecting payment from buyers of the firm's merchandise. Both credit and collections are important responsibilities-of financial managers. The finance manager must also be sure that the company does not lose too much money to bad debt losses (people or firms that don't pay.
Naturally, this means that finance is further responsible for collecting payments. These functions are critical to all types of businesses, but particularly important to small and medium-size businesses that typically have smaller cash credit cushions than large corporations.
Taxes represent an outflow of cash from the business. As tax laws and tax liability have changed, finance people have taken on the increasingly important responsibility of tax management. Tax management is the analyzing of tax implications various managerial decisions in an attempt to minimize the taxes paid by business Businesses of all sizes must concern themselves with tax responsibilities.
Finally, often someone in the finance department serves as an internal audit. It's the internal auditor that checks on the journals, ledgers, and financial statements prepared by the accounting department to make sure that all transactions have been treated in accordance with established accounting rules there were no such audits, accounting statements would be almost worthless. Regular internal audits offer the firm assistance in the important role of financial planning, which we will look at next.
Can you see the link between accounting and finance? They are mutually supportive functions in a firm. A firm cannot get along without accounting but neither can it prosper without short- and long-term financing, managing its funds well, minimizing its taxes, and investing its funds properly. In fact, finance is so important to a firm that some finance executives go on to be presidents of firms.
What would be the advantages and disadvantages of a president with a finance background versus a marketing background? Is there a danger of being too concerned with cost-cutting, budgeting, and controlling funds?
Words you may need:
Acquire- приобретать
сash –наличные (деньги)
flow - поток
treasurer - казначей
merchandise - товары
payment – оплата, платеж
medium-size - средний
ledger – гроссбух, (главная) учетная книга
statement – отчет (фин)
implication - вовлечение
internal - внутренний
transaction –сделка
advantage - преимущество
disadvantage – невыгодное положение
background - образование
outflow -утечка