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How is Finance Function related to Management Function?
In business practices, finance-related functions and management-related functions usually overlap each other. The finance function and the management function go hand-in-hand in most cases. For example, the Operations Managers looking to install a new machine (the Management Function) must get the money which is part of the Finance Function.
Usually, the finance function is the backbone of all management functions.Without financial functions, most and marketing operations will become redundant. Still, there is a fine line that separates management functions and financial functions. However, it is more important to study the overlapping situation than to look at the differences.
Note − Financial and management functions often overlap and are tied to each other.
The first finance role in the establishment of businesses is very important. Without finances, it is impossible to run a business as nothing is possible without finances. Finance is required to buy all the necessary tools of business.
The promotion also requires the finance function. The companies usually use the funds for promotion when the business seeks growth. Without money, promotion is not possible.
It is finance that enables production in meeting the future demand. The products must be ready for use of the businesses to run them efficiently and without financing this is impossible.
Growth measured by the number of employees, sales, and demand is all backed by finance. Without finance, growth would be impossible to sustain.
Companies cannot get rid of sudden needs without finances. For example, an oxygen supplier cannot provide cylinders in case of sudden demand without finances. It is finance that helps companies meet demands that are unforeseen and unexpected.
Note − A company can meet contingencies via the finance function.
A company cannot obtain opportunities that arise suddenly in the business without enough finances. This may happen to any industry. To explore the opportunities, businesses need finances. For example, if a restaurant chain wants to add more employees, it must be able to pay them on time.
A business cannot implement an idea without finances. Ideas can be acted upon only when there is enough money. Without money, companies can only see the ideas being implemented by a competitor.
Note − It is finances that are the lifeblood of companies. Businesses cannot run without finances.
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