(Finance) What actually happens in the finance department?

Background

We all have a rough idea of what goes on in departments like Sales, Marketing, Production and HR. But what exactly do finance guys do? We have an idea that they control budgets, produce the financial statements, and generally exercise great power as bean counters and guardians of resources.

The activity below is designed as a way in to the finance department. It’s best done with at least one finance person in the group – they can add, amend, say how it’s different in their company, etc. And bear in mind that the model below is for a large company – in a small company functions will be combined.

Activity

1 Write the word ‘CFO’ at the top of the board. Then write these three job titles below, as in an organigram: Financial Controller, Treasurer, Chief Accounting Officer.

2 Ask the students (and in particular anyone working in the finance area) how the finance function is divided between the four people, in other words what these four people actually do in their work. Write up all the ideas.

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For your information (and to give you something to feed into the discussion), here is the usual situation, as I understand it. Of course individual companies may do things differently.

CFO (Chief Financial Officer)

• supervising the three other people
• taking issues to the senior management team
• having responsibility for corporate governance
• working with the external auditors
• being responsible for the financial control of large projects

Financial Controller

• preparing forecasts and budgets
• comparing actual spending with planned spending
• other areas of internal audit and control

Treasurer

• accounts payable and accounts receivable
• managing cash flow in general
• contact with the banks

Chief Accounting Officer

• keeping the books
• preparing the annual financial statements (P&L, BS, Cash Flow)
• tax planning