What is the relation of finance function to other functions of a business enterprise?

Finance function integrates all other functions or operations of the company.

Withour finance function the company cann't run, do its statutory compliances, achieve its objects and meet stakeholder's expectations. 

Finance is the process of registering all the activities of the company in monetary terms for the purpose of generating useful reports that help the users of these reports and statements even external or internal users

This relationship is very straight forward and there is a direct relationship between finance function other function of a business enterprise. 

The main duty of finance function is to seek cheaper funds for future investment, in short to keep the weighted average cost of capital lower. The investment should be such that can generate a positve NPV.  As a result the business will sustain and achieve a growth. 

Now think of HR, Marketing, IT, all dependant on finance department. However there is a strong linkage between all these departments. If HR is not competent, they will not be able to bring the right people on the board and as a result investment objectives cannot be achieved. Same is the IT department which is directly related to finance function. Like in modern days where IT plays an important role in financial modelling. 

Finance is the Ignition to Run the Engine, Finance is the source to generate the revenue, to breath, to sense, its a complete chapter.

Ia a business, all functions originate with or are enabled by financing.

First, financing relates to other business functions through its role in establishment. Without financing, the business most likely would not exist, to say nothing of other business functions. Financing is what enables the purchase of the equipment, the leasing of the property, the buying of materials, employee’s salaries, marketing, etc.

Financing enables production in anticipation of demand. This is a necessary aspect of many businesses. For example, a store has products on its shelves, not merely a storefront with catalogs. Likewise, a carpenter does not wait until he gets a project to buy his tools.

Financing also enables promotion. The promotion of a business is an expensive venture, in some cases costing just as much as the cost of goods sold or staffing. Financing is required to fund promotion. A business will not get many customers if it does not advertise its presence, its product/service offerings and its value proposition (e.g. low price, great value, special features).

Financing also plays a role in the growth of a company. Without having advance orders and payment, growth would not be a possibility without financing. In most cases, company growth is preceded by an investment in more employees, more inventory, another location, etc.

Contingencies

Adequate financing also ensures that the company will be able to handle any contingencies that arise. A contingency is any sort of unexpected expense. As such, examples range from busted pipes to an ordering mistake that requires rush delivery to amend, or to hiring a temporary worker to cover someone who has an extended leave from the job. Anything can happen, but without financing the company would not be able to afford it.

Lastly, financing enables opportunities, which can arise at any time. Without financing, a company cannot take advantage of those opportunities. For example, if the company’s primary supplier of widgets is going out of business and liquidating its stock, if the company had access to financing, it would be able to purchase the widgets it needs at a substantially reduced cost, increasing its profit margin.

Finance is one of the most important functional areas of business and within business firms. It joins other functional areas like marketing, operations technology, and management as key areas of business. Business owners and business managers have to have at least a basic understanding of finance even if they outsource certain areas of their financial operations.

Relationship of Finance with Production:-Production department’s main duty is to produce the goods. For producing goods, it needs raw material, labor and other expenses. For paying all expenses, production department needs money and fund which will be fulfilled by finance department. Finance department checks the budget of production department and allow funds for production department. With this view, we can understand that production department is dependent on finance department’s decision. Now, if production department performs his duty honestly and products are produced and sold on time, it will be helpful for increase sale and profitability and it will again recycle the fund with high profit in finance department. So, we can say both are dependent on each other. Both are players of business team. Both should be adopt co-operative view for each other. After this, business team can succeed in business. 

Relationship of Finance with Marketing:-

Marketing department’s main duty is to sell maximum goods and satisfy the consumers. Its product’s input cost will decrease if all products are sold by marketers of company. For developing the product, promotion activities and distribution activities of marketing department need some money for paying salesmen, advertising budget and other promotional expenses. For this marketing department makes his marketing budget and it is cleared by finance department, but sometime finance department will not all specific marketing expenses but marketing department need that type of expenses for promotion of sales. This will create confliction. Good relations will be helpful for both departments. If both department does meeting and show behavior like good relative, the problem can easily solve. Both departments should think that both are the part of company’s organization and co-ordination between them is must. Sometime, marketing department obtains big order for supplying the goods, at that time finance department should help marketing department for arrangement of money for buying raw material and supplying fastly without any delay. 

Relationship of Finance with Personnel:-

Personnel is that science which manages the employees of company and finance is that science which manage the money. If personnel department and finance department work together with co-operation, both departments can satisfy the objectives of company. It is the objective of company to satisfy employee by fulfilling their financial needs. It is also objective of company to reduce the misuse of fund by paying excess salary that required cost of doing work by employee. So, both department should understand each other’s objective and should help other department for fulfilling the objectives. One more thing, financial decisions are also very necessary in human resource area. Corporate are moving to the development of employees. They are human resource capital of company. Now, investment in training of employees, incentive schemes and retirement schemes etc should be calculated like other investment and both departments should take maximum advantages from this asset. 

Finance is the necessity to start any business enterprise operating varoius functions-start.This is the yardstick through which an enterprenaur wants to see the result of the enterprise-financial terms.This is the aspect on which the continuance of an enterprise depends.So the vital knot of a business enterprise.

Finance Dept Consolidates and converts all other functions of the enterprise in to numbers to know the results of business

Finance dept keep tabs and controls wherever it is necessary to unitlise the resources optimally

Fainance is more or less the heart of the interprise. It pumps the blood throughout the hole enterprise. The added functions in finance is that it controls how much is pumped to each organ and when it is needed and it monitors the agreed fainancial performance of these organs and might adjust accordingly.

finance helps an organisation to grow or expand