The main function of a Finance Manager (FM) is to provide materially accurate information to the general public, shareholders, stakeholders and the management of an enterprise, be this a joint stock (limited liability) Company, social enterprise/charity or community association, such as a sports club or a parent/teacher organisation. This information will be of two types The first will be management accounts that provides information from which decisions can be made, showing the success - or otherwise - of the organisation in achieving it's goals and targets. The second is financial accounts that is more formal and fulfils legal and moral obligations of organisations. This will include profit and loss accounts at the end of a trading period, together with a balance sheet showing the assets and liabilities of the organisation. The FM, working with auditors and accountants, will complete and file tax returns and other information that is required by the Authorities that oversee the operation of the organisation. This type of information is usually produced annually, but for very large organisations, such as Corporations with operations all over the world, and whose shares are quoted on Stock Exchanges, data is often produced at the end of each quarter-year to ensure information is shared, and from which investors can make reasoned judgements. The format of the various reports can be quite simple - useful in small organisations, such as social clubs, but get more complex the larger the organisation. A second key function of an FM is to maintain control over the organisation. This is achieved in a number of ways. Target setting is the usual process, with objectives, defined as a budget set for each part of the organisation, showing how much revenue is required to support the cost structure, so that a trading profit is made at the end of the period. The FM has to work with all the other Managers in the organisation to make sure the objectives are reasonable, are understood and the whole team agrees with them. This process is very complicated and difficult, but once achieved helps the whole organisation. Once a budget is agreed, the FM can monitor progress by measuring what is actually happening against the plan, showing other Managers if they are on track, or some action needs to be taken to increase sales to generate more revenue, or stop spending to cut costs. The FM maintains control by determining processes and ways of doing things. For example, to spend money on something, it is unusual to have a process that establishes whether good value is being achieved by requiring the purchaser to look at different ways of buying what they want, getting different quotes from different suppliers. Processes like these help maintain control by having an audit trail that supports the purchase decision. Other functions will include those needed to be a manager, responsible for the people in the finance team, so good interpersonal skills are required, together with the ability to prioritise and organise.
