By Pastor J. A. Adeyokunnu
The finance department is the backbone of any organization’s operations and processes. It records operating transactions, analysis them and prepares financial statements that inform top management regulators and investors about an organization’s economic health. The finance department also ensures that internal mechanisms and policies comply with regulatory standards, industry practices and human resource policies.
An overview of the role of the finance department
- Maintain financial records.
- Payment of bills and expenses.
- Collection of account dues.
- Monitoring funds.
- Payment of salaries and wages/fringe benefits.
- Gives information to management for decision-making purposes.
- Asset management.
- Preparation and administration of budget.
- Ensures costs are controlled.
Contributions of Finance Department to the growth and development of the church
The finance department is an integral part of the Church workforce, providing the fuel that keeps the mission moving forward. By managing money wisely and staying informed about government regulations, the finance department ensures a steady flow of funds in the mission.
The roles of the finance department include:
1. Develop Accurate Budget – The financial department strives to develop a realistic budget that clearly indicates what the department will spend. In doing so, they help all provinces and departments of the mission plan their activities. The budget shows how much each province/departments can spend on a particular activity or necessity, such as a new equipment. To create an accurate budget, the finance tells the departments/provinces to determine what they need and modify unrealistic objectives.
2. Coordinate Activities With Other Departments – The finance department also tries to coordinate the flow of funds with the mission’s activities using long-range planning while preparing for short-term needs. This involves making sure the mission has sufficient funds for its activities when needed.
3. Capital Financing – When there are cash needs beyond day to day working capital, the finance department also advices and sources for funds for long-term financing.
Financing may be obtained through the bank. The department prepares the document required for the presentation and may work with outsourced consultants at times.
4. Financial Accounting – It prepares reports that ensure that the mission’s data is “true and fair” (accurate and objective). It also prepares financial statements that comply with generally accepted accounting principles (GAAP). A complete financial statement includes a balance sheet, a statement of profit and loss (also known as an Income Statement), statement of cash flow and a statement of shareholders’ equity.
5. Tax Planning – Management of taxes is also a function of the finance department. The finance department continues to watch the amendments and updates in tax laws and also creates good corporate relation with government by paying tax on time. The department evaluates staff data and advises top management on tax saving strategies and compliance with fiscal regulations.
6. Financial Risk Management – Financial risk management is also a function of the finance department that helps the mission identify and monitor risks that are inherent in the mission’s corporate activities. The department takes a lot of measure for managing the financial risks of the mission. Financial risk typically is more common in financial services rendered by banks and insurance companies.
7. Investment Analysis – The finance department regularly evaluates and analyzes how much surplus funds is available for investment. It also helps to select the type of investment instrument that best suits the mission’s needs, or evaluates securities such as stocks and bonds, or a category of securities, for risk, yield potential or price movements.
8. Payment Of Wages And Salaries – Preparation and maintenance of the payroll is also an important function of the finance department.
9. Foreign Transfer – The department assists the mission in fund transfers to foreign missions to meet their needs, thereby assisting in the quick spread of the gospel.