Importance of Accounting and Finance Functions, Duties, and Roles

This report analyzes the importance of accounting and finance functions, duties, and roles in business, with a focus on Skansa Plc. It discusses how these aspects contribute to business performance evaluation, compliance with statutory requirements, budget development, and external communication. It also explores the duties and responsibilities of finance and accounting managers in Skansa Plc.

FINANCIAL DECISION
MAKING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
TASK 1............................................................................................................................................2
Importance of accounting and finance functions, duties and roles..............................................2
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
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INTRODUCTION
Financial Decision Making is an important aspect in ensuring that all the finance related
aspects of the business are integrated in a detailed manner (Aga, 2019). Skansa Plc is a
construction company that mainly operates in Europe and plans to expand itself in multiple
countries. This report will analyse the importance that functions, roles and duties related to
accounting and finance.
MAIN BODY
TASK 1
Importance of accounting and finance functions, duties and roles
The accounting and finance department at the Skansa Plc mainly associated themselves with
the maintenance of the finances and budgets of Skansa Plc. Now that company is planning to
expand, there are various financial aspects that need to be considered. The importance that
accounting and financial aspects of business have in the overall operation can be illustrated as
follows:
 Evaluation of the Business Performance: Both accounting related and financial related
businesses help in the assessment of the performance of business related to profitability
as well as revenue generation. They help in preparation of all the financial statements
such as income statement, balance sheet etc. which help in the better understanding of the
overall performance. The management of Skansa Plc uses these functions to ascertain the
growth so that it can be ascertained that whether the objectives that were set by the
company are being achieved or not (Faccia and Mosco, 2019). This performance
evaluation acts as a critical figure in the measurement of the success and comparison of
strategic decision making of the company. The financial outcomes also help Skansa Plc
in taking important decisions such as expansions or investments that are to be made,
debts to be cleared etc.
 Compliance with Statutory Requirements: It is now mandatory as per the government
acts for companies to integrate the financial compliance regarding the statements that are
to be prepared and the different results that can be obtained accordingly. The statutory
compliance mainly deals with accounting standards compliance, depicting true and
relevant figures that can actually help in depicting the true figures and performance
before the financial investors of the company. Practices such as conducting annual audits,
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fulfilling returns and developing relevant books and accounts i.e. book- keeping. Skansa
Plc is also assisted by the accounting and finance related functions that help the
management in the better decision making and also ensures that the overall investors of
the company can gain a right idea about the funds of the company and also the net growth
of the company thus helping them in achieving their financial targets.
 Developing Budgets: The accounting as well as finance related functions are also
important in development of budgets and ascertaining the financial constraints that they
can use in order to understand that how much financially capable companies are and what
are the different investments that they can make. Further, the management of Skansa Plc
is also affected by the decisions that are affected by the budget preparation (Larasati and
et.al., 2017). They can easily cross verify that whether they were able to achieve the
targets that are set by the finance and accounts department and what are the areas in
which they need to further improve themselves. The future investments and decisions of
the company can also be influenced by this development of budgets as well. Therefore, it
can be easily identified that how important is the function of budget development for any
company.
 Increasing External Communication: Accounting and finance related functions also
contribute majorly in the improvement of the external communications that any
organisation might have with the other relevant parties such as stakeholders. The
financial statements are the main documents that any company uses to demonstrate its
performance and present a credible or trustworthy documentation while seeking external
assistance whether it is from government or from investors or shareholders. The loans,
IPO’s, funds, government licencing and approvals etc. all work on the basis of
authenticity and genuineness of the financial statements which act as communication tool
for the clients. For Skansa Plc as well, since now they are planning their expansion, this
is an important aspect of communication that can affect them significantly in arrangement
and procurement of funds.
Apart from the above points illustrating the importance of both accounting as well as
financial functions, there are various duties and roles as well that they are required to comply
with accordingly. These can be illustrated as follows:
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 Preparation of Financial Records: There are a multiple number of duties that have to be
complied by accounting along with finance department (Mohd and et.al., 2020). It is
mandatory for the finance managers of Skansa Plc to easily prepare financial records
irrespective of the time frame that they have developed. It is the duty of accounting
managers of Skansa to engage in the role of preparing accounts and book- keeping
practices. Finance managers engage in the duty of preparation of the financial statements
and they both collectively have to fulfil the duty of presenting correct and accurate
statements. These reflect the growth and revenue generation of the company collectively
and hence are a significant contributor in the presentation of the company before external
world. This is therefore, an important aspect in the fulfilment of duties and roles of both
finance and accounts manager at Skansa Plc.
 Tax Reporting and Inventory Processing: Duties related to tax fulfilment and ensuring
that correct returns are filed in a timely manner is one of the biggest duties that finance
and accounts manager have to comply at Skansa Plc. It can be easily ascertained that they
have to first correctly identify the profits that have been generated by the company and
then calculate the tax liability that they are required to fulfil after making all the
deductions and adjustments. Further they have to complete this entire process and file the
return before the due date so that they can ensure that no tax penalty or crime occurs
(Musah, 2017). Apart from this, inventory management is also covered in the duties of
accounts manager at Skansa as they have to regular check and verify that what are the
different levels that are being maintained and utilised in the company and its production.
 Collection and analysis of Data: Both accounts and finance managers at Skansa Plc,
have to perform the act of data collection, recording, analysing and then interpreting the
different financial transactions that occur in the companies. All the information related to
the growth of the company, its profitability in comparison with the overall industry
average and its competitors, analysis of the revenue generation, financial projections
regarding investments, fund generation etc. all are the key duties and responsibilities that
both the managers have to comply with at Skansa. Since Skansa is right now planning to
expand their business in remaining EU, the managers have to seek relevant data regarding
potential sales generation and revenue collection of the company. This will help the
managerial board in taking major decisions regarding what are the correct strategies that
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can be adopted by the board. This information also eases the process of other
professionals in ascertaining the expected performance of Skansa in other locations and
developing a robust expansion plan.
 Advise related to Funding of Project: The project funding often arises in any business
that is planning its expansion and in the regular course of operation as well (Muteti,
Namusonge and Nzomo, 2018). The directors of Skansa Plc also need a detailed funding
plan related to expansion. The managers will have to prepare multiple proposals related
to different locations that can be reviewed and shortlist the most rewarding and profitable
locations for the company which will ultimately help in minimising the decision making
time of Skansa. Additionally, the managers will also analyse the risks and returns that are
associated with the different proposals that they make and use different techniques such
as capital budgeting, investments and procurement of raw materials etc. This will
involve use of various accounting and financial techniques that are the most suitable for
Skansa. This is also hence an important role of that is to be complied with by both
finance and accounting managers in any company (Aga, 2019).
These are therefore multiple roles and duties that the finance managers as well as the
accounting managers of Skansa Plc. have to comply with so that they can correct decisions in a
timely manner and contribute effectively in the decisions making of Skansa Plc.
The above task helps in clearly ascertaining the different roles and responsibilities that have
to be fulfilled by both the finance as well as accounting managers of the company.
CONCLUSION
The research done in the entire report above helps in the analysis of different aspects that are
associated with the importance that both finance as well as accounting managers have in an
organisation with specific reference to the Skansa Plc. It was identified that they fulfil multiple
aspects that are relevant in any organisation and its fulfilment of multiple role and
responsibilities. Budgeting and forecasting was identified as the key practices that accounts and
finance manager are required to comply with. It can be concluded that both are an important
party in the fulfilment of the different functions related to finance.
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REFERENCES
Books and Journal
Aga, M., 2019. The Impact of Sustainable Financial Data Governance, Political Connections, and
Creative Accounting Practices on Organizational Outcomes. Sustainability. 11(20).
pp.1-16.
Faccia, A. and Mosco, D., 2019. Understanding the Nature of Accounts Using Comprehensive
Tools to Understand Financial Statements.
Larasati, I. P. and et.al., 2017. The accounting and financial model from the perspective of micro,
small, medium enterprises: does the concepts of knowledge really matter?. International
Journal of Business, Economics and Law. 14(1). pp.25-28.
Mohd, M. and et.al., 2020. Creative accounting and financial performance of public listed
companies in Malaysia. Humanities. 8(1). pp.12-22.
Musah, A., 2017. Benefits and challenges of bookkeeping and accounting practices of SMEs and
its effect on Growth and Performance in Ghana. Journal of Accounting, Business and
Management (JABM). 24(2). pp.16-36.
Muteti, N., Namusonge, M. and Nzomo, D., 2018. Accounting Systems for Records Keeping
Practices for Small Enterprise Development in Makueni County, Kenya. Open Journal
of Accounting. 7(3). pp.181-190.
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