Functions of Business Finance

Business finance is the finance or money that is available to businesses to perform their commercial functions. This financing can be in the form of a short or long term loan or even issuing equity that is shares.

Business finance includes the techniques that can be used by companies to acquire the funds and then manage a certain required balance between capital generated from loans and that from equity. It provides you with various techniques to analyze the health of the company that whether it will be able to generate necessary capital.

The purpose of business finance is therefore to deal with all the matters related to generating, maintaining, evaluating, and repaying the financing for commercial uses in a company.

Financial Planning
In order to keep departments funded and running correctly, business finance sectors must plan the correct amount for projects and release funds for departmental activities. Large businesses rely on business finance departments to control budgets and monitor the flow of funds. A strong analysis of the company's needs and present and future cash flows helps managers create a successful business model on which to base company decisions

Record Keeping
Reporting and analysis are a very important function of business finance departments. In order to publish accurate reports, proper record keeping must be paramount for a finance department. Business finance departments work closely with the financial heads of each department in order to publish reports to the company managers and shareholders.

Accounting
Business finance is the primary department sector that heads up the accounting field. Accounting information is what business finance departments use to make the various decisions that relate to the company's finances. In order to make accurate decisions, correct accounting data must be collected and compiled into reports that are reviewed and summarized by the department heads. A good accounting system is important for the decision making process along with a strong interdepartmental organization system.

Analysis
Business finance departments are also very involved in company investment activities and analyze possible investment opportunities. In order to keep abreast of the investment world, large companies often employ investment professionals in the business finance department to manage company investments.