A good strategy for managing financial resources is crucial to a company’s success. In a sector as demanding as real estate and construction, the finance department plays a leading role in managing a company’s resources, ensuring efficient financial management to maintain a balance sheet balance. Masterfully coordinating this department requires extensive knowledge of finance, economics and accounting. Furthermore, it is necessary to have a systemic and strategic vision of the business, learn about other areas, and have a well-defined financial structure.
Several functions are carried out within the financial department: cash control, account management, accounting, investment and risk management, financial planning, tax management and preparation of financial reports. Let us now talk in more detail about each of them.
Cash management is related to payments and receipts, it takes care of the company’s cash flow by controlling liquidity. It involves forecasting short-term and long-term funding needs, organizing funding and cash surpluses, and maintaining the proper balance between assets and liabilities.
The purpose of account management is to control the maturity of the company’s commitments, such as payment to suppliers, to avoid delays and fines and to control receipts.
Accounting manages the company’s assets and their variations. A company’s equity consists of its assets (assets and rights) and liabilities (obligations). It is the relationship between assets and liabilities that determines the profit or loss of a company. As a result, accounting records are a crucial instrument, as they provide data for decision-making by the financial manager.
Once all accounting records have been made, with the data provided, it is possible to carry out financial planning, ensuring a healthy budget and identifying when it is time to invest or reduce costs. Planning sets goals for the company’s future, so preparing and executing financial planning makes all the difference in business performance.
The financial department is also responsible for assessing the company’s market, exchange, credit and operational risks. Risk management is necessary to anticipate them, allowing you to take appropriate measures promptly to avoid problems or reduce their impact.
Companies have several tax responsibilities, so tax management is necessary to help control taxes and taxes, identify the best tax regime and framework for your area and ensure compliance.
The financial report compiles crucial information for a given period. This information is fundamental in business management and will allow, for example, to identify in a simple way when it is necessary to cut costs, which is the best investment or which measures to adopt to increase profit.