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“The Importance of the Finance Role And the Tools You Need to Support it”

“The Importance of the Finance Role And the Tools You Need to Support it”

  • Francisca Neves • EY Associate Partner - Assurance

The financial function in public and private companies has a huge relevance in ensuring the reliability and timely availability of financial information, which is a pillar for investors and consequent attraction of capital to the different markets, which enhances economic and social growth.

With the increasing complexities and demands of the market, both due to the complexity of activities and the multiplicity of investors, it is not enough for financial departments to have good staff, who have access to robust IT tools without risk of external attacks, and who have technical training to keep them up to date.

It is also necessary that they have access to both internal and external tools that robustly support their function and hence financial reporting.

Within the internal structure, there are some points that are common to all organisations and that need to be safeguarded so that the finance function can produce timely and quality information.

The first point is the need for companies to have, for each department, a description of the respective processes and procedures and that these are well designed and implemented, ensuring a level of internal control that supports the correct recording of all transactions in accordance with the company’s accounting principles.

The finance department has the task of equipping itself with data analysis tools that allow simple visualisation of structured data

Secondly, it is necessary for companies to have robust IT systems that are protected from external attacks, which will not only ensure the timely recording of transactions, but also subsequently make use of the financial information for analysis and future market prospects, while also ensuring that the full extent of their operations is captured. With regard to IT systems, it is also important that there is good interaction with the different systems that the company may need if it cannot have a fully integrated system.

Finally, it is necessary for the finance function to have a well-defined closing of accounts process, which should have at least the detail of all the tasks in the order they have to be performed and with the indication of the specific dates of each one, throughout the year, and especially at the end of its financial year.

For this last point, it is also important that controls are designed and implemented to detect any errors coming from the other departments and to ensure the timely interconnection of the finance department with the other departments of the company.

This structure of internal tools needs to be well implemented, on the one hand, to support the company’s decision-making and, on the other hand, to fulfil the needs of other users of financial information.

The finance department’s role is therefore to equip itself with data analysis tools that allow simple visualisation (through custom-designed dashboards) of structured data aligned with the organisation’s needs, in addition to its main function – that of producing financial reporting that is free of material errors and meets the requirements of its partners or shareholders, regulators and other financial reporting stakeholders.

However, the maintenance of this internal structure, which enables the finance department to fulfil its functions, also requires an external environment that supports and enhances it not only to be maintained, but also to be improved and adapted to the increasing demands of growing markets and the constant challenges of an increasingly complex business world.

Thus, in addition to the internal structure of companies, it is also important to have solutions to support them, namely in terms of support for the evaluation of the internal control system of their significant processes, as well as support on the most diverse accounting and financial reporting issues that are more complex.

This external structure, in addition to assisting in the monitoring of the internal system, should support companies in the difficult function of continuous qualification of their staff, in addition to its main objective of providing comfort on financial reporting. In this context, accountants, auditors, tax experts and other experts in specific areas of activity of each company, as well as regulators, have a key role in supporting the finance function, giving it the additional tools to fulfil the objectives of having a financial report that is free of material errors and thus brings added value to the markets and to society as a whole.

See Also

Ensuring the reliability of financial information and guaranteeing the quality and timeliness with which it is presented is a pillar for companies to have comfort in their business system and enhance opportunities for economic and social growth, thus the finance function is fundamental in all organisations. A corporate structure with reliable and timely information increases its attractiveness to internal and external investors and is aligned with the goal of building a better business world.

In short, the finance function within organisations is very relevant, being the department that aggregates all the information about the company’s operations and ensures the correct reporting of its activity in each financial year.

Ensuring that the information recorded and reported is correct, and that it is made available in a timely manner and in the form that decision-makers and investors need to obtain it, is to support the development of the market and, consequently, economic and social growth, thus the internal organisation of companies and the guarantee of an external structure that supports them are very relevant.

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